Japanese banks join cashless revolution in digital shift

This follows a regulatory change facilitating third party access to accounts and data.

Bloomberg reports that Japanese banks are now joining the cashless revolution by developing digital payments alternatives and working closely with fintech firms, effectively spelling the end of the nation’s heavy reliance on cash.

Also read: Asian banks fall behind Western counterparts in digital transformation

This comes as a regulatory change being phased in the next two years is set to facilitate the level of access depositors can give to third parties with regards to their accounts and data information. Last month, banks similarly submitted draft policies on application programming interfaces, or APIs, that will open up their systems to fintech firms. Financial services agency Celent expects most lenders to have open APIs in place by 2020.

Also read: Japan Bank Consortium to launch blockchain-powered app for domestic payments

The government also set a target last year of doubling cashless settlements -- defined as credit cards, debit cards and e-money -- to 40 percent of transactions over 10 years, as part of its “Society 5.0” future investment strategy.

“Releasing their own coins and payment methods is what the banks need to be doing,” said Eiichiro Yanagawa, a senior technology and banking analyst at Celent. “Banks that move too slowly will have their tastiest business eaten up.”

Here’s more from Bloomberg.