Japan Net Bank Japan's First Internet Only BankBank - Gül Ece Minver Özkan Şirin Yavuz Ünal Mustafa Sezer Soysal
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Japan Net Bank
Japan’s First Internet Only
Bank
Gül Ece Minver
Özkan Şirin
Yavuz Ünal
Mustafa Sezer SoysalCompany Background Business idea of Sakura Bank and Fujitsu Established on September, 2000. No Physical Branches – Internet-only bank ¥20 billion(US$167 million) capital President: Yoshiyuki Miyai
Yoshiyuki Miyai had a vision…
Customer satisfaction should be the focus of JNB’S
business:
- Convenient access to accounts
- Competitive rates
- Customisation
- Secure transmission of information
over the WebHow to achieve...
JNB achieved these targets by:
Low operation costs
Flat management structure
Flexible computer systems
Small workforceJNB’s Mission To build up its own brand name independently and to become the de facto standard of the Japanese-style “Internet Specialised Bank” for the 21st Century’s Internet Community.
Japan Net Bank’s Shareholders
5%
5%
5%
5% The Tokyo Electric Power Co., Inc
NTT Docomo, Inc.
Nippon Telegraph and Telephone
10% East Corp.
Mitsui & Co. Ltd.
60% Nippon Life Insurance Co.
Fujitsu Limited
10%
Sumitomo Mitsui Banking
CorporationBusiness Principles CONVENIENT COMPETITIVE CUSTOMIZED CONFIDENTIAL
Organisation & IT System
•Flexible,flat, team-like
structure
President
•Low operating costs
•Small and young workforce
Part-time Staff Full-time Staff •Full-time (52) and part-
time(50) employees
•Not top-down
Information
Call Center Planning Sales
TechnologyIndustry Background
US online banking lost customers..
too time consuming
poor customer service
Online banking has both
Advantages and
Disadvantages
24/7 availability Lack of brand
Lower transaction costs recognition and
Lower operation costs physical presence
having no physical locations Traditions
reducing the inefficiencies Security and privacy
Small workforce issues
Trust problemResults
Age
Access
Sex
Hour 24%
44% 25%
Female
0:00-9:00
75% Male
9:00-17:00
32%
17:00-24:00Business Targets to be achieved
by 2002
1 million accounts in 3 years
¥1 trillion of deposits
¥84 trillion of loan balance
Begin making a profitCompetition in The Industry
Products/Services Japan Net BankAverage of City Banks
Ordinary Deposit % 0.050 0.022
"Net" TermDeposit (1 year) % 0.200 0.073
Charge of Fund Transfer (less than ¥300,000) 168 420
to Other Banks (more than ¥300,000) 262 630
Charge of Fund Transfer Internet ¥ 52 105
within the Bank i-mode ¥ 10 N/ABricks-and-mortar Banks
Banking habits and conservative consumer culture favor traditional
banking
Traditional banks provide variety of value-added financial services
They are more convenient and also providing online services
JNB’s advantages over bricks-and-mortar banks
Lower overheads
Competitive rates
Lower Fees
Flexible organizational structure
Strong AlliancesOther E-Banks
BANKS
JNB Sony Bank IYBank eBank
Starting date of October,2000 June,2001 May, 2001 June,2001
Operations
Major Shareholders SMBC(60%), Fujitsu Sony Corp.(80%), IY Bank(51%), Seven- Japan Telecom,Yamato
Ltd.(10%), Nippon Life SMBC(16%) Eleven Japan(49%) Transport, Ericsson
Insurance Co.(10%) Holding International
Starting Capital ¥20 billion ¥37,5 billion ¥20.3 billion ¥ 4.4billion
Starting Services Ordinary Deposit, Term Deposits, Card Loans, ATM-based services Settlement of Payments
C
Deposit, Money Bank Payments
r
Transfer, Small-size
i
Consumer Loan, Cash
t
Card, Credit Card
e
Business Targets 1 million accounts , ¥1 ¥500000 billion in 3 ¥60 billion in a year, 10 No information
r
trillion of deposits, ¥84 years, ¥1 trillion in 5 million customers per
i
trillion of loan balance, years; customers day, profitability in 2
a
make a profit by 400,000 in 3 years and years
financial year 2002 600,000 in 5 years
Strategies higher rates, lower fees, higher rates, lower fees, 24/7 ATMs, low cost No information
small workforce, no small workforce, no operations, loan and
physical branches physical branches card business focused
Survey Results 6.3% 9.8% 16.8% 3.7%Strategic issues
Advantage of strong,broad, strategically important
and multi-industry alliances
President of Sakura Bank Akishige Okada
remarked:
JNB’s strength lied in its alliance with many blue-
chip corporations.
Two kinds of alliances:
Shareholding
Non-shareholdingScalability Vs Investment Scalability was a major concern with JNB, Customer behavior on the internet is unpredictable Demand might surge dramatically In order to cope with sudden demand changes, To be scalable to limits far above average Make accurate demand forecasts Build the necessary infrastructure
Questions
1. What are the main
characteristics of JNB’s
organisation and IT
system ?
2. Why scalability is so
important for JNB ?Thank you!
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