Breaking Japanese Megabank Mold: Transforming Both SMBC Group and Japan

New faces are shaking things up in SMBC Group’s Digital Strategy Department. Hiroshi Shimizu, Yuta Torisu, and Saori Nakai have joined up mid-career to help build a new innovation ecosystem. Despite raised eyebrows about their audacious leap across to a megabank, they are now combining their experience with SMBC Group strengths to drive open innovation. Here, they discuss why they chose SMBC Group, the culture and strengths they’ve discovered, and their vision for the future.

Synthesizing digital capabilities and professional expertise to drive open innovation

While remaining solidly grounded in financial services, SMBC Group is also reaching beyond traditional boundaries to resolve social challenges through digitalization and technology. Shimizu, Torisu, and Nakai are spearheading this effort by combining their respective professional expertise with the power of digital tools to tackle open innovation.

Shimizu

I’m currently developing a service to guarantee the accuracy of remote identity verification. The idea is to digitally streamline legally mandated identity verification methods. If we can link personal attributes with payments using this mechanism, we should be able to market it well beyond banking—for preventing reselling on e-commerce platforms, for example.

Hiroshi Shimizu, Senior Vice President, Digital Strategy Department, Sumitomo Mitsui Banking Corporation/Sumitomo Mitsui Financial Group
Torisu

I’m currently handling two missions in the generative AI sphere. One is building a business ecosystem that engages various stakeholders inside and outside SMBC. The aim is to pursue generative AI-driven open innovation by strengthening our relationships with IT vendors, consulting firms, and startups, as well as a range of players outside the tech sector.

The other is market intelligence, gathering and analyzing information on industry trends, customer needs, competitors, and the economic environment and looking at how financial institutions should use generative AI and other digital technologies for decision-making and strategy development. Given that generative AI is also an important topic in terms of management strategy, I’m exploring how to leverage it to boost SMBC’s competitiveness.

Nakai

As part of the innovation team addressing Web3—a new, decentralized internet built on blockchains—I’m utilizing blockchain technologies in the digital asset and crypto asset space to create services for both financial and non-financial applications. I can’t say too much at the moment, but I’m developing services that will position SMBC as a front-runner in such areas that our competitors haven’t even touched.

I’m certainly finding it challenging to develop financial and non-financial services leveraging emerging technologies and also create new markets for them, but I think that our position as a comprehensive financial group will give us strategic advantages in entering these new markets and establishing our services.

Drawn to SMBC Group’s open innovation and tech-forward stance

The three joined SMBC at different times—Shimizu in January 2023, Nakai in July that year, and Torisu in February 2024—with each bringing distinct career experiences.

Torisu

I spent over a decade as an IT analyst at foreign think tanks and consulting firms, examining various businesses’ digital initiatives from the outside through “a macro lens” and providing advice. That constant dialogue with digital project managers and IT firms inspired me to switch sides and drive digital initiatives myself. I felt that it was important in terms of my career to move beyond my macro-level work to “micro-level" engagement in a digital project, experiencing the challenges and rewards of working on the front lines.

The financial industry as a whole has been an early adopter of digital technologies—so why did they single out SMBC? They point to the way in which SMBC engages users to bring cutting-edge technologies into popular use.

Yuta Torisu, Senior Vice President, Digital Strategy Department, Sumitomo Mitsui Banking Corporation/Sumitomo Mitsui Financial Group
Torisu

Since the financial industry has always been pretty data-centric, it’s better positioned than other industries for digital transformation. But even in such a front-running industry, SMBC seemed to be one step ahead, starting with its digital financial service Olive. It also meant a lot to me that SMBC’s service design philosophy prioritizes not just technological innovation but the user experience. Advanced technology isn’t enough—if you don’t ensure that the service embodying that technology offers a great UX, customers will eventually drift away.

Nakai

The speed of SMBC’s technology uptake really impressed me. Back when I was working for a telco, I was creating new services in partnership with other companies and developing business in fintech, which integrates technologies into financial services. Even then, I saw SMBC as a digital pioneer.

Having handled fintech initiatives at a company focused on non-financial services, Nakai wanted to use that experience to launch new business somewhere that put financial services at center stage. She saw SMBC’s broad scope—using digital technologies to roll out both financial and non-financial services—as an opportunity for professional growth.

Nakai

When I first spoke with someone at SMBC, I have to admit that my interest was quite casual—I was just curious to hear what a megabank had to say. But I discovered an organization eager to launch its own services, as well as to collaborate with partners to create new services, and even to tackle global markets. I found the opportunity it represented to spread technology by deploying it in services used in society incredibly appealing.

Shimizu, who built his career at an IT firm and a consumer goods manufacturer, had not initially planned on joining a financial institution either.

Shimizu

Unlike Torisu, I’ve always worked on tangible projects. It was when I became involved in technology-driven business restructuring that I realized that traditional Japanese mechanisms and approaches just aren’t globally competitive.

Looking around at the various companies, though, nothing seemed more compelling than what I was already doing—until I heard about the Digital Strategy Department. I was fascinated to find that they were doing something completely different from what I imagined a financial institution’s business to be. The idea of working with inherently intangible financial services, and especially technology-enabled ones, intrigued me precisely because I couldn’t quite picture it.

With their impressive but diverse backgrounds, all three faced skepticisms over their shift to a megabank.

Nakai

Some still view megabanks as old-fashioned, and people asked why on earth I’d want to join one now. But SMBC Group has thoroughly embraced cutting-edge technology, and megabanks remain a driving force in Japan’s economy. I felt that this would translate into greater impact for business projects that I set up, as well as broader service adoption. The depth of experience would be different at SMBC, which seemed to offer a much broader vision of Japan’s business landscape than other companies.

Strengths in deep and granular customer understanding and C-suite’s sense of urgency

Saori Nakai, Vice President/Digital Business Expert, Digital Strategy Department, Sumitomo Mitsui Banking Corporation/Sumitomo Mitsui Financial Group

All three agree that the factors that drew them to SMBC—rapid technology uptake, commitment to open innovation, and creation of non-traditional business for a financial institution—have proved to be genuine sources of job satisfaction.

Nakai

We have in-depth discussions with clients not just in finance but across a whole range of industries, business models, and scales so as to understand each other’s business ahead of potential collaboration, and that has really added breadth to my knowledge and capabilities—a breadth that is also crucial for business development, because it allows me to remain flexible in my thinking and spot service opportunities across various domains.

Torisu

When trying something new here, there do exist challenges and constraints around regulations and organizational characteristics that aren’t visible from outside, but working within a company has provided so many insights I couldn’t have gained in my previous roles.

SMBC’s extensive nationwide network and close corporate relationships provide unique advantages for open innovation initiatives, they add.

Shimizu

In corporate banking, we work with the client company’s management, which has a deep understanding of not just financial issues but their fundamental challenges as well. This provides a solid foundation for considering the best approach to solving the problem at hand.

Nakai

I agree. The depth and granularity of SMBC’s customer understanding is remarkable—the result of continuing to build touch points and trust with customers over many years.

They also cite management’s strong sense of urgency and commitment to change as major attractions.

Nakai

There’s a real willingness to push the envelope despite the risks involved.

Torisu

For instance, around spring 2024, the Digital Strategy Department spearheaded a plan to use generative AI to create an SMBC promotional video. There was some internal resistance to creating content using an advanced technology like generative AI due to the reputational risk and other factors, and initially I thought we were going to struggle to get the proposal through. But in the end, senior management gave us the go-ahead. They welcome fresh ideas from the front lines and make swift decisions. I’m often surprised that a bank can be so receptive.

Shimizu

The further up the management structure, the stronger the drive for change, and it’s the C-suite that is actually leading the charge. That’s what makes the SMBC corporate culture so progressive.

Global by default: SMBC Group’s world-spanning business ambitions

Operating in this dynamic environment, the three are focused on creating new business and new values—with a decidedly global outlook.

Shimizu

With my international background, I see it as my mission to expand our services across Asia and beyond. More and more startups are thinking globally from day one, and if we don’t create Japan-centered business, the status quo here in Japan will never change. I think it’s important that SMBC Group plays a key role in that transformation.

Nakai

Global boundaries are already disappearing. With Web3, the market is inherently global, and partner companies aren’t limited to Japan. Building services with this global mindset needs to become our default approach.

They’re also keen to drive open innovation not just outside SMBC but including the Group’s own human resources.

Torisu

Diversity, equity, and inclusion (DE&I) will be key. We need to create an environment where career bankers and specialists from other fields like us can recognize each other’s value and complement each other’s weaknesses as we work toward a common goal. Building an organization that maximizes individual potential by valuing inclusion as the progression from diversity is essential for open innovation.

They each bring their own philosophy to achieving their missions, carving out a path in a way that is true to themselves.

Nakai

I’m a sci-fi fan, but my professional motto is that morality without economics is just dreaming. Particularly when developing services with cutting-edge technology, we often pursue seemingly impossible goals, so it’s crucial to find that point of compromise between technical achievement and the actual service and commercial viability. In creating new services, I will savor challenges and the chance to harness new technologies while also pursuing profitability.

Torisu

I’ve made tomato pasta every weekend for over a decade. I just really love the process of constant refinement through repeated trial and error toward an ideal. I want to carry over that mindset of ongoing exploration driven by internal dialogue into my role of creating connections with the outside—in other words, open innovation—in the generative AI space.

Shimizu

They say that the best friends fight the most, and I think that Japanese companies still need more genuine debate. Real strength comes from honest discussions regardless of age or position. Bring it on, I say! When you fight and make up, only the best solutions remain, and that’s how I want to change the status quo and create something new.

SPEAKER BIO
* The departments, titles, etc. of the people introduced in this story are as of the time of writing.
  • Senior Vice President, Digital Strategy Department, Sumitomo Mitsui Banking Corporation/Sumitomo Mitsui Financial Group

    Hiroshi Shimizu

    After a stint as an IT engineer developing embedded car navigation systems and data encryption, Shimizu worked at a consumer goods manufacturer, handling commercial sales, overseas M&As, business management, and new ventures in dairy farming and wine before taking leadership on group IT strategy planning and architecture modernization strategy. At SMBC, he develops new digital ID-based business and manages an open innovation facility.

  • Senior Vice President, Digital Strategy Department, Sumitomo Mitsui Banking Corporation/Sumitomo Mitsui Financial Group

    Yuta Torisu

    Joined SMBC in 2024, focusing on market intelligence in relation to generative AI and the wider data platform space, as well as business ecosystem development. Previously spent over a decade as an IT analyst at foreign consulting firms and think tanks. Extensive lecture and publication history.

  • Vice President/Digital Business Expert, Digital Strategy Department, Sumitomo Mitsui Banking Corporation/Sumitomo Mitsui Financial Group

    Saori Nakai

    Develops new services, alliances with other companies, and Web3 services (digital assets, crypto assets, and alternative investments, etc.) as part of the Digital Strategy Department’s innovation team. Previously worked in financial services development, big data utilization, and alliance initiatives at financial institutions and the fintech division of a telecommunications company. Holds an MBA in organizational theory. Outside work at SMBC Group, she launches new businesses and engages in event management and presentations in the fintech community. Her interests include history, sci-fi, Doraemon, and cooking. She recently obtained a boat license and is learning helmsmanship.