Tokyo s Global Position as a FinTech Hub: Expectations vs Reality

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Alexandrina Ramsey
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1 Tokyo s Global Positio as a FiTech Hub: Expectatios vs Reality ICA Japa October 1 st, 2018 Maurizio Raffoe, CEO Fietiq Ltd: LikedI

2 Disclaimer The views ad opiios expressed i this presetatio are my ow ad do ot reflect the views of ay compay I am associated with or have bee associated with i the past This presetatio is ot a advertisemet, is beig distributed for iformatioal ad discussio purposes oly ad it should ot be costrued as legal or regulatory advice o ay subject matter The iformatio cotaied herei is ot ivestmet or fiacial product advice ad is ot iteded to be used as the basis for makig a ivestmet decisio No represetatio or warraty, express or implied, is made as to the fairess, accuracy, completeess or correctess of the iformatio, opiios ad coclusios cotaied i this presetatio - ICA Presetatio 2

3 Your Preseter Maurizio Raffoe - British Educated Fiace Vetera Iteratioal Experiece 100% It a Source: Wikicommos - ICA Presetatio 3

4 Why are we here today? Beside for the driks FiTech acquirig larger relevace Japa aimig ot to miss the boat Eg. Sigapore saw i 2016/17 over 25% of ew fiace jobs thaks to FiTech Source: FiTech Futures - ICA Presetatio 4

5 Ageda Termiology Some backgroud iformatio o FiTech Japa s FiTech visio Success Factors to develop a FiTech Hub Tokyo s eco-system ad curret iitiatives Tokyo compared to other global hubs Q&A - ICA Presetatio 5

6 Termiology - ICA Presetatio 6

7 Preamble Let s get some terms right FiTech is t Bitcoi FiTech is t Blockchai Form of fiacial iovatio drive by the applicatio of ew techology to the world of fiace Eco-system of techology, fiace, ivestors, govermet ad cosumers Five major areas: Decisio Makig, Savig, Borrowig, Paymets ad Risk Maagemet - ICA Presetatio 7

8 Itroductio to FiTech - ICA Presetatio 8

9 What is FiTech used for? FiTech Applicatios Decisio Makig => Robo Advisory, Algo tradig Savig => olie bakig Borrowig => crowdfudig Paymets => digital wallets Risk Maagemet => blockchai - ICA Presetatio 9

10 Brief History Lesso Why is FiTech Relevat? 2008 Fiacial Crisis High Speed Iteret Basel III, Solvecy II, Mifid2 Mobile Data (3G, 4G, 5G) Ope Bakig Microchip techology Digital Busiess Models - ICA Presetatio 10

11 Brief History Lesso Why is FiTech Relevat? Digital Busiess Models Source: SAP, The Itelliget Eterprise - ICA Presetatio 11

12 Japa s FiTech Visio - ICA Presetatio 12

13 Japa s FiTech Visio The Premise I the last few years, FiTech has become a referece cocept for govermetal istitutios to promote ecoomic growth, productivity gais ad etrepreeurial opportuities Chages to the Bakig Act set the stage for Ope Bakig reform ad FiTech Developmet - Ope APIs - Fiacial istitutios ivestig i FiTech Compaies removed 5% hurdle - Virtual Currecies ad VC Operators Cashless Japa official goal of 40% cashless trasactios (from less tha 20% curretly) - ICA Presetatio 13

14 Japa s FiTech Visio Ad its relevace to Tokyo Trasversal support for FiTech developmet i Japa METI s Visio - Comprehesive Policy Recommedatios, May 2017 Prime Miister s Office: 2020 Pla - Focus o promotig supply system iovatio ad huma resources developmet - Istitutioalized regulatory sadbox approach Tokyo Metropolita Govermet s Global Fiacial City Visio - Blockchai, FiTech ad New Tech accelerators, Startup Visa Program - ICA Presetatio 14

15 Japa s FiTech Visio METI s Visio Source: METI, Japa s FiTech Visio, May ICA Presetatio 15

16 Japa s FiTech Visio Prime Miister s Office 2020 Pla Istitutioalizatio of regulatory sadbox to promote ew techologies to improve users coveiece, stregthe compaies growth potetial, ad realize a cashless society, the govermet will cosider how to promote use of FiTech. Focus o AI, IoT, Big data, RPA - ICA Presetatio 16

17 Success Factors to develop a FiTech Hub - ICA Presetatio 17

18 Success Factors to develop a FiTech Hub Four Pillars I a 2016 study, Deloitte idetified four key factors How does Tokyo stack-up i those areas agaist other major cities? - ICA Presetatio 18

19 Tokyo FiTech Iitiatives - ICA Presetatio 19

Tokyo FiTech Iitiatives Govermet, Corporates, Grassroots Tokyo Metropolita Govermet s Global Fiacial City Visio, November 2017 - Four Mai Goals 1. Become Asia s Fiacial Hub 2.

20 Tokyo FiTech Iitiatives Govermet, Corporates, Grassroots Tokyo Metropolita Govermet s Global Fiacial City Visio, November Four Mai Goals 1. Become Asia s Fiacial Hub 2. Attract talet, ivestmets ad techology 3. Cotributio toward solvig social issues 4. Focus o Asset Maagemet ad FiTech - Blockchai, FiTech ad New Tech accelerators - Startup Visa Program - Tokyo Oe-Stop Busiess Establishmet Ceter - Fiacial Oe-Stop Support Service: joit cosultatio service with the Fiacial Services Agecy - Tax Reductio efforts i coordiatio with the cetral govermet - ICA Presetatio 20

Tokyo FiTech Iitiatives Govermet, Corporates, Grassroots FiTech Accelerators: Fiacial Istitutios supportig FiTech Developmet MUFG FINTECH ACCELERATOR - Cohort 1: Alpaca Japa, SmartIdea, XeoData Lab,

21 Tokyo FiTech Iitiatives Govermet, Corporates, Grassroots FiTech Accelerators: Fiacial Istitutios supportig FiTech Developmet MUFG FINTECH ACCELERATOR - Cohort 1: Alpaca Japa, SmartIdea, XeoData Lab, ZeroBillBak, Kowledge Commuicatio - Cohort 2: AyPay, OLTA, GoodMoeyger, CrowdReality, SIMout, Nayuta co., Robot Fud, - Cohort 3: AdGo, MDR, Credit Egie, NNF, Factbase, Restar NOMURA'S VOYAGER ACCELERATOR Focus o six core social issues: - Retiremet-focused ivestmet ad savig solutios - Utilizatio of idle real estate assets - Create techology ad experiece drive ivestmet ad asset gatherig solutios - Iovatio i corporate accoutig ad fiacial maagemet - New services that ca shape work practices ad busiess models i the future - Smart cities - ICA Presetatio 21

22 Tokyo FiTech Iitiatives Govermet, Corporates, Grassroots FiTech Accelerators: Silico Valley comes to Tokyo - Just lauched 1 st Batch of graduates accepted secod batch - Mix of Japaese ad Foreig start-ups across IoT, Mobility, FiTech ad IsurTech - Silico Valley best practices brought to Japa - ICA Presetatio 22

graduates accepted secod batch - Mix of Japaese ad Foreig start-ups across IoT,

23 Tokyo FiTech Iitiatives Govermet, Corporates, Grassroots FiTech Accelerators: Silico Valley comes to Tokyo but Chia remais mai focus - Just lauched 1 st Batch of graduates accepted secod batch - Mix of Japaese ad Foreig start-ups across IoT, Mobility, FiTech ad IsurTech - Silico Valley best practices brought to Japa - ICA Presetatio 23

24 Tokyo FiTech Iitiatives Govermet, Corporates, Grassroots Other accelerators which are FiTech-friedly - ICA Presetatio 24

25 Tokyo FiTech Iitiatives Govermet, Corporates, Grassroots Agel ivestig ad Veture Capital as essetial fuel for FiTech Growth While the Asia fitech market cotiued to be domiated by Chia ad Idia, Japa was able to break ito the regio s top veture deals list with a $63 millio Series A raise by Folio. [KMPG, The Pulse of FiTech 2018 ] Softbak s Visio Fud, $100b global behemoth But also, SBI, Rakute Yet, largest CVC ivestmets are i Robotics, AI (Toyota, Paasoic, Soy) - ICA Presetatio 25

26 Tokyo FiTech Iitiatives Govermet, Corporates, Grassroots - ICA Presetatio 26

Tokyo FiTech Iitiatives Govermet, Corporates, Grassroots Commuity ad Ecosystem developmet goig strog - Plety of cofereces, evets, meetups - Area of focus: blockchai - Shared workspace

27 Tokyo FiTech Iitiatives Govermet, Corporates, Grassroots Commuity ad Ecosystem developmet goig strog - Plety of cofereces, evets, meetups - Area of focus: blockchai - Shared workspace dedicated to FiTech i the heart of Otemachi - Evets ad collaboratio efforts with parter compaies - Log-term Goals - Produce a Uicor - Develop a ew globally accepted service solutio - ICA Presetatio 27

28 Tokyo vs Rest of the World - ICA Presetatio 28

??? Source: Z/Ye, The Global Fiacial Cetres Idex 23 March 2018

29 FiTech Hub What s the World s perceptio of Tokyo? Geeral Positio as a Fiacial Hub What is behid its positio???? Source: Z/Ye, The Global Fiacial Cetres Idex 23 March 2018 Source: Z/Ye, The Global Fiacial Cetres Idex 23 March ICA Presetatio 29

30 FiTech Hub What s the World s perceptio of Tokyo? Deloitte Global FiTech Hub Review Japa has see strog growth i the FiTech ecosystem i the past two years, as FiTech startups, idustry players, regulators ad govermet have collaborated to build a sustaiable ad scalable eviromet for iovatio. Tokyo has a vibrat FiTech etwork, ad the regulators have recetly lauched FiTech-friedly laws aroud blockchai ad APIs, alog with iitiatives to support ew FiTech startups. As the third largest ecoomy i the world, there is opportuity for both B2C ad B2B players to eter the market. - ICA Presetatio 30

31 FiTech Hub Chia s Megacity takig over 2018 Update Tokyo just outside of Top 10 - ICA Presetatio 31

32 FiTech Hub Chia s Megacity takig over 2018 Update Tokyo just outside of Top 10 Breakdow of rakigs Low score i FiTech cosumer Experiece Source: Siai Lab from Academy of Iteret Fiace (AIF), Zhejiag Uiversity - ICA Presetatio 32

33 FiTech Hub What s the World s perceptio of Tokyo? Questio: I additioal to Silico Valley, which three cities will be see as leadig techology iovatio hub over the ext four years? Source: KPMG, The Chagig Ladscape of Disruptive Techologies - ICA Presetatio 33

34 FiTech Hubs What is the competitio? - ICA Presetatio 34

35 FiTech Hubs Tokyo s competitive advatage High Desity of Fiace ad Idustry cluster Over 600 baks, almost 2,000 securities compaies ad almost 100 isurace compaies Source: Acceture - ICA Presetatio 35

36 FiTech Hubs Iteratioal Mometum Sigapore ad Hog Kog hostig week-log FiTech cofereces X Partly i Japaese, with foreig speakers presetig i Eglish X Costs about 8x more tha HK/Sigapore - ICA Presetatio 36

FiTech Hubs Hut for Talet The Times World Uiversity Rakigs: Top 100

Uiversity, raked 35 - Kyoto Uiversity, raked 51 - Natioal Uiversity

coutries to be a computer scietist: - Japa does t make the top 10

37 FiTech Hubs Hut for Talet The Times World Uiversity Rakigs: Top 100 Computer Scieces Uiversities 2 Japaese Uiversities: - Tokyo Uiversity, raked 35 - Kyoto Uiversity, raked 51 - Natioal Uiversity of Sigapore: 11 ; Hog Kog Uiversity of Sciece & Tech: 28 Best coutries to be a computer scietist: - Japa does t make the top 10 accordig to HackerEarth - Media salaries are low Source: hackerhearth.com - ICA Presetatio 37

38 The reality of doig busiess i Japa Red-tape ad costs Busiess set up costs Visas Red-tape Bak accouts Source: World Bak - ICA Presetatio 38

39 The reality of doig busiess i Japa Taxes Taxes are a key factor i determiig where to start busiesses No Start-up tax framework such as the UK s EIS ad SEIS or R&D tax credits UK: the Patet Box scheme, where compaies pay a lower rate of Corporatio Tax o profits eared from their pateted iovatios Source: tradigecoomics.com - ICA Presetatio 39

40 The reality of doig busiess i Japa Not coducive for start-ups Compass Cosultig published i 2017 a Global Startup Ecosystem Rakig Tokyo??? Source: Compass Cosultig - ICA Presetatio 40

41 The reality of doig busiess i Japa Therefore o Uicor yet 18 based i the US ; 4 i Europe, 1 i South America ; 4 i Chia ; 2 i Idia - ICA Presetatio 41

42 FiTech Alumi Tokyo-based success stories Eterprise Resource Plaig Platform Olie Asset Maagemet Platform Persoal ad SME Fiacial Maagemet Cryptocurrecy exchage - ICA Presetatio 42

43 FiTech Alumi freee Oe of the oldest start-ups i Japa, lauched i 2012 Raised USD 60m i August 2018 i Series E fudig, icludig Lie ad MUFG Seed Ivestor: DCM Vetures, a Silico-based VC with office i Tokyo Creatig a ERP solutios eco-system i partership with Lie - ICA Presetatio 43

44 FiTech Alumi Folio Larger Series A (A plus A2) fiacig, raisig about USD 80m Broad participatio by CVC eco-system, icludig Mitsui Sumitomo Vetures, Lie ad Rakute - ICA Presetatio 44

45 FiTech Alumi Moey Forward Also well established (set up i 2012) Take a forward role i corporate fiace: bought Klavis (solutio provider for busiesses), ivested i Campfire series A ad i August 2018 bought cloud-solutio platform Wakufuri Lookig at lauchig a crypto exchage - ICA Presetatio 45

46 FiTech Alumi bitflyer Japa s leadig crypto exchage Expadig ito the US & Europe Ivested i by, amog others, Sumitomo Mitsui, Mizuho, SBI ad MUFG - ICA Presetatio 46

47 Coclusios What s ext for Tokyo? Strog policy push, more groud-level work eeded to be doe Olympics => catalyst for the adoptio of techologies for a cashless society Further eco-system growth - Hackathos - Iovatio Labs - Greater VC ivolvemet, ot just CVC Research & Developmet: Academic ivolvemet More Eglish-laguage services Taxes, taxes, taxes - ICA Presetatio 47

48 Q&A - ICA Presetatio 48

49 Tokyo s Global Positio as a FiTech Hub: Expectatios vs Reality ICA Japa October 1 st, 2018 Maurizio Raffoe, CEO Fietiq Ltd: LikedI

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