The Critical Career Path: IT Employee Development in the Japanese Financial Services Industry

September 27, 2007

Abstract

Tokyo, Japan September 27, 2007

The Critical Career Path:  IT Employee Development in the Japanese Financial Services Industry

In an increasingly competitive market, focusing on the accumulation of IT knowledge and human resource development is crucial to the continued success of Japanese financial institutions.

Japan's baby boom generation is beginning to retire, draining IT expertise from the financial services industry. In a new report, , Celent examines  the challenge presented by the "Year 2007 Problem."

The operating environment for financial institutions has changed dramatically in the past decade. Technology has become a crucial factor in business strategies. The report addresses the measures that major Japanese financial institutions are taking to accumulate IT knowledge, develop and retain employees who understand both business and IT issues, and use IT to meet changing business demands.

The elements that financial institutions need to fully utilize IT in their business strategies are:

  • Systematic accumulation of IT knowledge
  • Development of employees who understand both business and IT
  • Development of flexible systems
  • Attractive career paths and fair evaluation standards

"Even financial institutions that haven't yet realized the value of these factors will soon be forced to recognize them," says Yumiko Manchu, analyst at Celent and author of the report. "They will be facing competition across industry sectors from overseas firms entering the Japanese market."

Securities firms have most significantly incorporated IT knowledge into their business plan, followed by banks and then insurance companies. Securities firms have already been swept up in the globalization trend. Banks are groping with generating synergies between business and IT. The insurance sector, having focused on the domestic Japanese market for years, has comparatively little recognition of the importance of technological innovation.

This report has 25 pages and includes seven charts and one table. A table of contents is available online.

Members of Celent's research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary 03
Introduction 05
Background 05
Using IT to Execute Business Strategy 06
Expanding IT Expertise in the Organization 08
One Language for Business and IT 08
Development Standards 09
Use of Enterprise Architecture 09
Developing Employees Who Understand Both Business and IT 10
Use of General Contractors 10
Different Positions Require Different Types of Employees 12
Developing Employees Who Know Both Business and IT 14
Rotating Employees to Build Expertise 14
Attractive Career Paths and Fair Evaluation Methods 18
How Financial Institutions Are Responding 20
How IT Subsidiaries Are Responding 22
Conclusion 24
The Need for a Comprehensive Approach 25
Issues Remain 25

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