STRATEGIC PARTNERS
In Japan, Sony Bank made headlines when it launched last year as an Internet-only bank. Now it offer services through a network of 25,500 ATMs. Rival IY Bank, which had depended solely on ATMs, had added an online component to its offerings.
January 30, 2002
TOKYO -- Sony Bank, which offers banking services primarily through the Internet, has added a network of ATMs at post offices to its list of ATMs available to customers.
The alliance with Japan's sprawling postal savings network will give the bank a huge reach. The system handles 25,500 ATMs nationwide.
The bank's list already includes a network of 7,574 ATMs at Sumitomo Mitsui Bank, in addition to those installed at convenience stores. The use of Sony Bank's ATMs will be free until March 31, but eventually it will charge 105 yen (78 cents) as usage fee on weekday business hours after two free withdrawals. It charges the same fee for the use of ATMs at Sumitomo Mitsui Bank and convenience stores.
Sony Bank, the financial services subsidiary established by electronics and entertainment giant Sony, also offers investment management advice. Sony Bank employed a new and user-friendly medium to convey investment management advice by leveraging on its parent company's experience in entertainment and communications. This comes at a time when several foreign players are closing down retail operations in Japan.
The bank is also working on the idea of providing asset management advice in an "entertaining" way to boost savings. Sony Bank president Shigeru Ishii said: "Often, women and younger people are not familiar with asset management. The 'amusement' aspect is important to attract them."
Online, account holders have access to a website called MoneyKit that offers investment advice. They can choose from an assortment of investment funds online, mostly offered by U.S. financial companies such as Merrill Lynch. They can make purchases with their Sony Bank account, with a click of a mouse.
The bank had attracted about 38,000 customers, mostly in the 20-to-30 age bracket, as of last September. The bank keeps operational costs low and operates with a staff of 100 split between two offices. It does little advertising and does not expect to post a profit until the fiscal year ending March 2004.
IY goes online
Another Japanese financial institution, IYBank, which has even less physical presence, has added online banking in the hopes of acquiring more customers and overcoming losses from its ATM-only venture.
By adding the online service in which customers can open or transfer accounts, IYBank joins the ranks of online banks Sony Bank, Japan Net Bank and eBank Corp.
The bank, which started operations in May 2001 as an ATM-only bank, has attracted about 20,000 customers. It has 2,253 ATMs and plans to expand to 3,600 ATMs by the end of March.
IY Bank, initially targeted to be profitable in two years, has adjusted its target in order to break even in three years' time. It eyes ATM daily use to reach at least 70 transactions on average.
Created in April 2001 by major retailer Ito-Yokado Co. and 7-Eleven Japan Co., IYBank suffered a net loss of 5.6 billion yen ($42.1 million) when it failed to attain its daily target for the use of its ATMs installed at 7-Eleven outlets.
IYBank recently concluded an agreement with Sumitomo Mitsui Banking Corp, UFJ Bank and Asahi Bank allowing customers of these banks to use IYBank's ATMs.
