Legacy Modernization in Japan’s Financial Industry, Part 2: What the Auto Industry Can Teach the Financial Sector

by Eiichiro Yanagawa, September 16, 2015
Industry Trends
Asia-Pacific

Abstract

Japan’s financial industry is transitioning from considering modernization to implementing it, and what industry players require most right now is a methodology for legacy modernization.

This report delves more deeply into the current state of legacy modernization in Japan, provides an in-depth analysis of the survey results, and considers likely directions for the future.

As a corollary, the report explores the evolution of the auto industry, distilling lessons from it for Japan’s financial industry.

The automobile industry was the proving ground of the most significant and world-changing innovation of the last century, and has continued to reinvent itself. Celent believes that modernization in the auto industry embodied the following characteristics.

  • The supply side and demand side developed in tandem. At the same time that the production process evolved to improve productivity, quality, and efficiency, the industry created new consumers and new ways of consuming, and changed the way people live.
  • A single model soon gave way to a full line of products and services, mandating that supply side firms (producers) not only devise sales strategies but also overhaul their cost structures.
  • In order to control production and marketing, sales channel reform was not enough, and a flexible production line (core system) was required.

“Even today, cars are rapidly being transformed from something concrete, like an advanced industrial product, to something more abstract, like a safe and comfortable means of mobility,” says Eiichiro Yanagawa, a senior analyst with Celent’s Asian Financial Services practice and author of the report. “This history has been driven by disruptive entrepreneurs, from Daimler in the 1880s and Ford in the 1910s to Sloan in the 1920s and Taiichi Ohno in the 1950s.”

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 operating unit 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

1

 

Key Research Questions

1

 

Definitions

1

Introduction

2

 

Industrial Revolution in the Auto Industry and Modernization

2

 

Modernization in Japan

4

Legacy Modernization 2015 Survey Overview

7

 

Survey Items

7

 

Overview of Survey Participants

7

Implications

9

 

Survey Results

9

 

In the Words of Respondents

10

Celent’s Recommendations

12

 

Digital Financial Services and Legacy Modernization

12

 

Digital Native Initiatives

13

 

Legacy Modernization Framework

15

Conclusion

18

Appendix

20

 

Respondent Profile

20

Leveraging Celent’s Expertise

22

 

Support for Financial Institutions

22

 

Support for Vendors

22

Related Celent Research

23

Sign in to download reports and access personalized information