By Caroline Bowler, Managing Director of Bowlah PR, Asia’s first Fintech specialist PR agency.  Based in Singapore, Caroline enjoyed a previous career in financial services and has maintained her love for the industry ever since. Follow her on Twitter @carobowler or @BowlahCom. Some more by her for Irish Tech News here.

Moneytree is one of the standout successes on the Japanese fintech scene. Led by SBI Investment, the financial data aggregation platform completed a series B round for 1 billion yen in May. We speak to one of the founders, Mark Makdad, about his journey to entrepreneurship and the future of fintech in Japan.

Mark Makdad, co-founder of Moneytree, is not your typical Japanese entrepreneur. Originally from the United States, Makdad graduated from the University of Illinois in 2004 with a B.A. in East Asian studies. Included in the degree was a focus on Japanese, originally selected for fun, but Makdad was soon hooked on mastering the complex language. In 2005, he moved to Yokohama for one year of intensive study and never looked back.

Working life started in Tokyo with a professional services company, alongside a blend of local and international colleagues. Makdad soaked up the experience, developing roots in Asian working culture and networks. While there, he met Paul Chapman and Ross Sharrott, his soon to be co-founders. They found a shared passion for emergent technology and began their collaboration.

The roots of Moneytree

Coding began on Moneytree in 2012. It is an ‘opt-in’ data aggregation platform, connecting consumers and small businesses, with 99% of Japanese financial institutions via a mobile application. It collates information from bank accounts, credit cards, loyalty points, digital money and securities via secure APIs and provides the result in one consolidated view on iOS, Android, and web. It can track spending, monitor work expenses, and alert users to any significant financial transactions.

For banks, limitations within core systems meant data could only be kept for a few months. With the Moneytree platform, banks can now track data for lifetime of the clients. To date, the application has had 1.5 million installs with a half billion transactions safely secured.

Notably, the company has received investment from three of the Japanese megabanks’ venture funds, Mitsubishi UFJ Capital, Mizuho Capital and SMBC Venture Capital. In their latest series B round, the company raised JPY 1 billion led by SBI Investment with a number of investment partners including UK asset management company, Baillie Gifford. Makdad shared one early lesson; simplicity is key. “Keep the structuring of your company as simple as possible” he advises other entrepreneurs. “Later on, when you start to raise, you’ll be thankful.”

Makdad attributes part of their success to the quality of their workforce. “Talent in Moneytree is strong. We have a strict process and an admittedly gruelling interview. Cultural fit is one thing but we’re more interested in candidate’s future career trajectory and goals. Is there a natural fit between their career aspirations and what Moneytree can offer?” Using this approach, the team has grown to over 30 full-time employees, with enviable retention rates.

International face of Japanese fintech.

Fintech in Japan has experienced a slower trajectory than in many other Asian countries. However, it has seen a recent spike in investment, reaching $154 million in 2016 according to CB Insights. As Westerners, the founders of Moneytree are referred to as the ‘international face of Japanese fintech.’ In response to this, Makdad commented that “Japan has talent and ideas. The problem lies with communicating this outside its own borders.”

Like other maturing entrepreneurial centres, Japan lacks a strong venture capital environment and broad sophisticated investor base. The Abe administration has set to address this via latest iteration of the Japan Revitalisation Strategy. It is developing its attractiveness as an innovation hub by utilising open APIs, embracing blockchain technology, and supporting new fintech applications.

“The value of the FAJ is a seat at the table.”

The local fintech community has been equally proactive. The Fintech Association of Japan (FAJ) started as a monthly hangout with peers, but within a year developed in to a trade association. It views the industry from a start-up perspective, although it has 160 corporate members, including representatives from the major banks and regulators. Part of their work comprises drawing up best practice guidelines for the flourishing industry. In his role as head of the API and Security committee, Makdad works closely with his counterparts in the Japan Bankers Association (JBA). He believes it to be “a cautious but engaged community, with 50% of JBA members actively considering APIs. However, concerns remain around industry standardisation and the potential for fraud.” Collaborations initiated through the close working relationship with FAJ are designed to help industry navigate this change.

Recent legislative updates are equally supportive. The Banking Law Amendment encourages open innovation from banks and co-operation with fintechs. The law, set to take effect in 2018, mirrors European efforts with PSD2. ”It is roughly equivalent to PSD2’s PISP and AISP” explained Makdad. “Banks cannot deny access without proper cause. Any fintech in good financial standing can apply to register.” The law is in keeping with a collaborative spirit of innovation, creating an obligation to comply, rather than forcing a one-size-fits-all approach. Nonetheless, assurances have been given at government level that in 3 years, 80 out of 120 banks will be providing access to fintechs via APIs.

While the financial services industry is undergoing seismic changes, greater challenges remain. There is a low penetration of smartphones among the over-60s, accounting for one-third of its population. Internet banking in Japan has fragile customer adoption-rates: between 20-40 percent. It remains a heavily cash-based society with a weak risk appetite. Combined, such factors create a hard ground for the digital revolution to flourish.

For the Moneytree team however, their future lies farther afield, with a launch in to Australia later this summer. “We believe that Japan is not alone in facing increasing fragmentation of the financial landscape. With tools like ours, we provide the opportunity to make money real and relevant again. From young to old, our simple app will unleash the potential of data portability and create new tools for the benefit of everyone in the markets we serve.”


If you would like to have your company featured in the Irish Tech News Business Showcase, get in contact with us at [email protected] or on Twitter: @SimonCocking

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