Japan's effort to nudge its more than 100 struggling regional lenders into the digital age is floundering.
More than a year after rules to spur open banking were issued, small lenders are stuck in a back-and-forth with startups over fees for access to client account data, according to a Financial Services Agency official. Fintechs that must reach agreements with individual banks before a May deadline say they don't have the resources to pay hefty charges or crisscross the country convincing hold-outs.
The impasse risks embarrassing policymakers keen to lift Japan off the bottom of a ranking on fintech adoption. A successful move into open banking would put Japan in the company of the U.K. and Australia, which are freeing up data access to spur competition and create innovative financial solutions.