Skip to main content
The Financial Institutions Business Unit (FIBU) develops and maintains systems and services for megabanks, insurance and securities firms, and regional financial institutions. In recent years it has begun actively expanding from its base in Japan to other countries.
We work closely with our customers to solve social issues in the financial industry. These range from financial crimes to economic issues such as the liquidity risks caused by “under the mattress” cash storing, which is common in Japan but regarded as an obstacle to economic development.
The trend toward cashless payment is growing rapidly in advanced countries, but concerns about other methods mean that cash is still the dominant medium for payment in Japan. The issues caused by cash payment include not only the risk of money laundering but also the heavy burden of maintenance time and cost on the financial institutions that must prepare change, transport cash, and provide physical security. We believe Japan will follow other countries and become a cashless society, and that this will be a business opportunity for us as well.
Another major issue is the “financial divide”—disparity in available financial services by region and generation. This divide is growing more severe in Japan, largely because of aging communities in rural areas. Because the older generation is not as familiar with smartphones, financial services provided by apps may not have achieved wide penetration in this cohort, which may cause other financial divides. Elsewhere around the world, there are many people who do not have access to financial services in developing areas. This could hamper stable economic development. In responding to these issues, financial institutions are expected to launch new services.
This calls for our business unit to play new roles, in turn, as a provider of financial systems.
In an era of population decline and aging in Japan, we view our innovations in response to customer demand for more efficient and labor-saving solutions as part of our social contribution. We have also begun providing new services to insurance companies, applying Hitachi technology in fields like AI and big data. This service uses medical big data analysis to predict future hospitalization due to lifestyle-related diseases, including the number of days spent in hospital. Through this analysis, we found that the conditions for subscribing to a new insurance scheme should be relaxed more significantly than was expected. This allowed the insurance scheme to take on more patients with longer medical histories or currently under treatment. Within one month of the condition's revision, approximately 300 new applications were approved. This is a remarkable success for a new financial service.
Of course, we must also consider the risks of conducting new businesses. Cyber attacks could be regarded as the largest risk. Financial institutions are constantly exposed to such attacks. Because we support financial customers' core systems, we make all efforts to prevent data leakage, especially of personal information. The Hitachi Group has institutional experience in protecting against diverse risks across a wide range of business areas. We are constructing a new security system that will cover the entire Group to serve our customers across industries and make Hitachi's security technology available throughout society.
For any business involved in finance, it is important to be aligned with government directives and regulations in different countries and regions. In China, for example, the central government is taking the initiative in promoting digitization, including smart payments. Even everyday shopping in China is paid for using smartphones, and, in parallel, the number of bank branches and new ATM installations is shrinking. In India, the situation is slightly different. Circulation of high-value bank notes was stopped in 2016 to fight corruption, tax evasion smuggling and other crimes. This led to rapid moves to go cashless but persistent demand for cash remained particularly among the poor. We will closely examine these circumstances and advance our support for cashless payment as well as enriching current offerings.
Our business unit creates innovation with customers to contribute to society. From that perspective, all of the SDGs are important for us, but we focus mostly on achieving Goal 9. We also wish to contribute to Goal 8 by promoting better workstyles through our services and to Goal 17 through further customer collaboration. Because we are closely connected to social development in terms of financial infrastructure, we believe all of our actions must be directly connected to the SDGs. This is also our response to investors and other stakeholders who highly value activities oriented toward SDGs. Our Corporate Credo formulated by Hitachi founder Namihei Odaira, “Contribute to society through the development of superior, original technology and products,” still guides us today. We have taken the SDGs as a guide for all of our employees in order to contribute to society.