- First time for bank to work with tech startup on new service
- App to help customers choose suitable investment trusts
Mitsubishi UFJ Financial Group Inc. struck a deal with a financial technology venture in a bid to boost investment trust sales by providing information through a smartphone application.
The Fundect app, which was developed by Finatext Ltd. as part of a competition run by Mitsubishi UFJ, helps users to select investment trusts and exchange information about the funds, said Ryota Hayashi, chief executive officer of the Tokyo-based venture. It shows banner advertisements for the bank.
“This product meets the needs of users immediately, which is something that banks and securities firms have been lacking,” Hayashi said in a phone interview on Thursday. “Our first goal is to get 100,000 downloads.”
Japanese banks including Mitsubishi UFJ are trying to increase fee income as low interest rates sap loan profitability and slowing growth in Asia limits credit expansion elsewhere in the region. The popularity of investment trusts is increasing as Japanese stocks are poised to complete a fourth year of gains.
It’s the first time for Japan’s biggest banking group to work with a fintech startup on a new service, Hayashi said. Taiki Kitaura, a spokesman for Mitsubishi UFJ in Tokyo, confirmed the deal.
While this agreement doesn’t involve any financial investment by the lender, Japanese regulators are seeking to clear the way for deals that do. The Financial Services Agency said Wednesday that it will recommend a law revision enabling banks to take larger stakes in companies outside banking, such as financial-technology ventures.