Japan Net Bank Case Analysis
Table of Contents
1. Introduction 2
2. Internet banking in Japan. 3 2.1.Conservative consumer banking behavior 3 2.1.1.Low level of credit card usage 3 2.1.2.The availability of ATMs for cash withdrawals 3 2.2.Internet usage in Japan 3 2.3.The competitive situation 4 2.3.1.Competition from traditional banks 4 2.3.2.Competition from domestic Internet banks 4 2.3.3.Competition from international Internet banks 4
3. Japan Net Bank’s competitive advantages 5 3.1.24/7 availability 5 3.2.Competitive interest rate 5 3.3.Customized services 5 3.4.Confidentiality of usage 5 3.5.Flexible organization and IT system 6
4. Strategic alliances to develop 6 4.1.Shareholder alliance 6 4.2.Global strategic alliances 6 4.3.Non-shareholding alliances 7
5. Conclusion 7
Introduction
This report was commissioned by Japan Net Bank (JNB) senior managers to gather comprehensive data about the present market situation in the Japanese banking sector, regarding the Internet-only model of retail banking, and to provide recommendations of how to consolidate and further develop Japan Net Bank’ position as the first Internet-only- bank in Japan.
The banking market, especially Internet-only bank sector, in Japan was going through a period of rapid growth after the Japanese government initiated the famous “Big Bang” deregulation of the financial market. JNB, which began operation in October 2000, aimed at winning one million accounts and one trillion yen deposits and becoming profitable by the financial year 2002. However, in order to achieve that long-term success, it needed to resolved a number of issues and strengthen its competitive position in face of stiff competition from brick-and-mortar banks and new Internet-only banks.
Therefore, this report focuses on the following three issues: • An assessment of the present situation in Japan regarding the Internet-only model of retail banking, • An analysis of JNB's competitive
1. Introduction 2
2. Internet banking in Japan. 3 2.1.Conservative consumer banking behavior 3 2.1.1.Low level of credit card usage 3 2.1.2.The availability of ATMs for cash withdrawals 3 2.2.Internet usage in Japan 3 2.3.The competitive situation 4 2.3.1.Competition from traditional banks 4 2.3.2.Competition from domestic Internet banks 4 2.3.3.Competition from international Internet banks 4
3. Japan Net Bank’s competitive advantages 5 3.1.24/7 availability 5 3.2.Competitive interest rate 5 3.3.Customized services 5 3.4.Confidentiality of usage 5 3.5.Flexible organization and IT system 6
4. Strategic alliances to develop 6 4.1.Shareholder alliance 6 4.2.Global strategic alliances 6 4.3.Non-shareholding alliances 7
5. Conclusion 7
Introduction
This report was commissioned by Japan Net Bank (JNB) senior managers to gather comprehensive data about the present market situation in the Japanese banking sector, regarding the Internet-only model of retail banking, and to provide recommendations of how to consolidate and further develop Japan Net Bank’ position as the first Internet-only- bank in Japan.
The banking market, especially Internet-only bank sector, in Japan was going through a period of rapid growth after the Japanese government initiated the famous “Big Bang” deregulation of the financial market. JNB, which began operation in October 2000, aimed at winning one million accounts and one trillion yen deposits and becoming profitable by the financial year 2002. However, in order to achieve that long-term success, it needed to resolved a number of issues and strengthen its competitive position in face of stiff competition from brick-and-mortar banks and new Internet-only banks.
Therefore, this report focuses on the following three issues: • An assessment of the present situation in Japan regarding the Internet-only model of retail banking, • An analysis of JNB's competitive