SMFG, Yahoo Japan forming big data fintech venture
Unit will crunch bank's customer data to generate more business
TOKYO -- Sumitomo Mitsui Financial Group and Yahoo Japan are forming a joint venture to sift through the Japanese megabank's rich troves of customer data for ideas on improving and expanding services.
The 300 million yen ($2.71 million) unit will be established as early as September. Yahoo Japan will hold a 51% stake and SMFG the other 49%.
Japanese bank holding companies are generally barred from owning more than 15% of nonfinancial companies, but a law in force since April allows for bigger stakes in financial technology firms.
SMFG, which has collected some 40 million pieces of customer information including details on ownership of stocks and other assets, will keep that data within its group while crunching it with Yahoo Japan's analysis tools to look for patterns. Parsing savings and payment data on customers who eventually bought a home, for instance, could yield clues to the best time for the bank to make mortgage offers. Thirty-somethings who are increasing their savings may be about to take out home or education loans.
The partners will also develop a smartphone app and look to offer SMFG financial services to the roughly 37 million people who use Yahoo Japan's shopping and auction services.
The two companies are co-investors in online banking pioneer Japan Net Bank, each holding a 41.16% stake, but the new venture will mark Yahoo Japan's first time starting a company with a financial institution. The internet company aims to hone its data analysis technology to improve online ad placement.