Foreign Firms Target Singapore Market as Japan Tightens Fintech Regulations
The Rise of Japan’s Fintech Ecosystem
Japan is emerging as a strong player in the fintech landscape across Asia, driven by its focus on reliability and regulatory clarity. This has attracted foreign financial institutions looking to establish a presence in the region. According to industry leaders, working through trusted institutions and aligning with Japan’s supervisory environment are key factors for success.
During the “Japan’s FinTech Frontier: Investing in Innovation and Inclusion Across Asia” session at the Singapore FinTech Festival 2025, panelists highlighted the importance of partnerships when entering the Japanese market. Consumer expectations and the precision of Japan’s regulatory framework make collaboration essential for foreign players.
Rob Schimek, Group CEO of bolttech, noted that Japanese consumers are digitally savvy and highly protective of their data. He added that the country's regulator is extremely sophisticated and disciplined. These characteristics create a unique environment where trust and compliance play a critical role.
A Collaborative Approach to Fintech Growth
The panel agreed that Japan’s fintech trajectory is shaped by diverse forms of collaboration. Makoto Shibata, Chief Community Officer and Head of FINOLAB, explained that while acquisitions are common, there are also more strategic investments being made. New models like banking-as-a-service are creating innovative value propositions.
These models allow both established financial institutions and new entrants to deliver services within existing institutional frameworks. Shibata outlined how this collaborative environment developed over a decade. Initially, FINOLAB started with five startups, and now it has 57 members, including 17 international startups. He added that the wider Japanese ecosystem now includes around 600 to 700 fintech companies, reflecting stronger integration with major financial institutions and fewer stalled proofs of concept.
Digitalisation and Regulatory Reforms
Masashi Namatame, Senior Managing Executive Officer and Group Chief Digital Officer of Tokio Marine Holdings, described how digitalisation has reshaped Japan’s financial sector. It has reduced the boundaries between banking, insurance, and telecommunications. Over the past decade, he said, Japan’s digital innovation in the banking industry has been almost entirely unlocked.
Regulatory reforms have expanded the range of services that traditional financial institutions can offer. Updates to banking and insurance rules have enabled diversification into new business areas. Additionally, the Financial Services Agency’s FinTech Week has created a national platform for engagement among startups, technology providers, and institutions.
Namatame emphasized that Japan’s regulatory environment has become extremely supportive of innovation and technology, as well as partnerships. This shift has encouraged greater participation from both domestic and foreign firms.
Expanding Access Through Collaboration
Shibata also highlighted how new collaboration models, such as banking-as-a-service, are widening access for underserved groups. He cited examples of banks enabling foreign nationals in Japan to access deposit and remittance services through a streamlined structure. These initiatives reflect a growing commitment to inclusivity and accessibility.
Coordinated Development Over Disruption
The panel reinforced that Japan’s fintech direction is defined by coordinated development rather than disruption. Regulatory clarity, institutional trust, and demographic needs continue to shape how both domestic and foreign firms participate in the market. This approach ensures that innovation is sustainable and aligned with the needs of consumers and businesses alike.
As Japan continues to strengthen its fintech ecosystem, the emphasis on collaboration, regulation, and inclusion will likely remain central to its growth strategy. For foreign institutions, understanding and adapting to these dynamics will be crucial for long-term success in the Japanese market.
