The Financial Services Agency plans to allow banks to target advertising sales using their customer data as part of its moves to ease restrictions on the banking industry, informed sources said Tuesday.
The FSA aims to help commercial banks reshape their business models and contribute to recovery in the coronavirus-hit Japanese economy and regional revitalization through full-fledged deregulation, the sources told Jiji Press.
A working group of the Financial System Council, which advises Prime Minister Yoshihide Suga, is set to come up with a draft report including the eased regulations by the end of this month.
The deregulation has approval for banks' foray into the advertising market as its main pillar.
Specifically, the FSA, at megabank groups' strong request, will allow banks to use information on their users' account activities and credit card histories so they can sell companies space on their websites for advertisements targeting specific age groups, genders and purchasing habits.
The financial industry regulator will also give the go-ahead for banks selling information and technology systems they developed on their own to regional banks, running staffing services and acquiring full stakes in unlisted regional revitalization firms.
The country's banking law imposes strict restrictions on the business scope so as not to put bank customers' money at risk.
But competition is heating up in the banking industry, with fintech services booming and nonfinancial institutions starting cashless payment services. Also, banks are suffering from the extremely low interest rate environment created by the Bank of Japan's prolonged massive easing policy.
Under these circumstances, the FSA sees the need for banks to promote digitalization quickly and strengthen their business bases.
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