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Finance

Suga digitization push to put all financial filings online by 2022

Japanese banks and insurers still submit vast majority of documents on paper

Tokyo skyscrapers. Japan's banks will move to more digitalization under Prime Minister Suga's plan.   © Reuters

TOKYO -- Japan will move all applications and filings from banks, insurance companies and other financial institutions online by the end of March 2022 under Prime Minister Yoshihide Suga's push to digitize the government.

Japan lags in embracing digital forms, particularly in its financial sector. In contrast, the U.S. let small businesses file for federal coronavirus relief loans online. The U.K. allows a wide range of documents to be submitted online through the FCA Connect platform.

Estonia, seen as a world leader in online governance, also has digitized almost all government forms, including those on financial matters. But Japan accepts most only on paper and during weekdays, limitations that have been both inefficient and costly.

As of the end of March 2019, Japan's Financial Services Agency required paper submissions for 1,612 of the 1,767 applications and filings under its purview. This meant an online option existed only for 8.8% of them.

As an emergency response to the coronavirus outbreak, the FSA in July temporarily began accepting forms from financial institutions via email, and without the hanko stamp widely used in Japan in place of signatures. But filings regarding a change in leading shareholders or operating hours, as well as financial disclosures, still must be made in paper.

The agency wants to permanently digitize all such forms, eliminating the need for companies to bring the documents to an FSA outpost or mail them in. It has selected a vendor to develop an online filing platform, which is expected to debut by the end of March 2021.

The regulator also aims to update any ordinances and guidelines as needed to complete the shift online by March 2022. Requirements for hanko stamps will be scrapped as a general rule. The agency hopes these changes will cut costs and improve customer service at financial institutions.

The FSA will urge private-sector institutions to bolster online services as well. Though more banks let customers check account balances or transfer money online, they still require face-to-face meetings for opening new accounts or signing a mortgage. The banks face growing competition from financial technology companies that offer services based entirely online.

Many of the in-person and in-paper requirements stem from long-standing customs in the financial industry. The FSA will coordinate with industry groups like the Japanese Bankers Association as part of its plan to go digital.

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