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Medium-term management plan

In April 2022, aiming to become a leading FinTech company in the age of zero cash, Rakuten Bank, Ltd. formulated a new Medium- to Long-term Vision to further expand our customer base, strengthen our revenue base, and capture growth in the FinTech domain.

1. Management Philosophy

We are conscious of our social responsibility and public role as a bank, and we will work to win the unshakable trust of society and firmly establish our value through a commitment to sound and efficient business operations based on a high level of self-discipline. Moreover, as a member of the Rakuten Group, we share the Mission, Vision, Values and Principles set forth below. We aim to contribute to society while boosting corporate value and aspire to coexist with society as a Global Innovation Company in the FinTech domain.

Mission

Contribute to society by creating value
through innovation and entrepreneurship

Empowering people to realize their hopes and dreams,
embracing new thinking,
Rakuten changes the world
through innovation.

Vision

Global Innovation Company

We drive disruptive innovation, engaging knowledge, creativity, and passion
from around the world to achieve ambitious goals and help build communities
in which people can pursue their dreams and live in happiness.

Values and Principles

Rakuten Shugi
(Rakuten Basic Principles)

Comprising two components—Brand Concepts and Five Principles for Success—Rakuten Shugi embodies the core values of the Rakuten Group, understood and practiced by our employees.

With Rakuten Shugi as a common foundation, we possess an entrepreneurial spirit that drives us to get things done.

By working with local communities and nurturing a robust corporate culture enabling each member of our diverse team to perform at their best, the Rakuten Group is committed to boosting corporate value and contributing to progress in society.

2. Medium- to Long-term Vision Overview

(1) Economic and Business Environment
The digital shift precipitated by the COVID-19 pandemic continues to evolve, even as consumption and economic activity return to normal.In this environment, megabanks and leading regional financial institutions are increasingly investing management resources in the digital banking domain, where they are pursuing digital transformations (DX) in the traditional banking business and enhancing services, including alliances with FinTech companies. Internet banks are also incorporating non-banking financial functions that include credit cards, securities, and insurance within their groups, accelerating the trend toward financial holdings that pursue synergies among companies that provide financial functions. Further, Internet-related companies and other types of businesses are entering the financial services industry, and in preparation for the future zero-cash era in banking transactions, there is an accelerating shift from physical in-store transactions to digital banking transactions.For over 20 years since our establishment in 2000, Rakuten Bank has made efforts to provide convenient online financial services to as many customers as possible, and has been used by many individual and corporate customers, surpassing 12 million accounts at the end of January 2022. As one of the core companies performing the Rakuten Group's financial functions, we have also been deepening collaborations with various Rakuten Group financial services. In the “first growth stage,” we are proud to have promoted the digitalization of financial services as a pioneering digital bank.
(2) Direction of Business Expansion
Our basic policy is to increase customer numbers and transaction opportunities per customer by maximizing synergies with the Rakuten Ecosystem to become a leading FinTech company, and further accelerate business expansion under appropriate risk controls. In our business for individual customers, we will aim to (1) become “a bank used as a main account” and (2) digitally transform existing transactions at physical branches into a “safe, secure, and convenient bank” that leverages technologies and can be used anytime, anywhere. In our business for corporate customers, we will make use of data and technologies to provide loans, deposits, currency exchange and all other banking services tailored to the needs of our customers, with the aim of becoming (1) “a bank that provides convenience to all customers regardless of company size” and (2) “a banking partner to corporate managers,” as we expand our share in the Japanese financial market.
(3) Numerical Targets
We aims to achieve the following specific numerical targets to realize growth as a leading FinTech company through the implementation of business initiatives described in section 3 below. We will also allocate the management resources necessary for further improvements to our compliance and risk management frameworks, system stability, and operational robustness in line with the expansion of the business scale.

3. Growth Strategy for the “Second Growth Stage” Aimed at Achieving the Medium- to Long-term Vision

(1) Customer Base Expansion
Leveraging the following business environment and our strengths, we are accelerating customer acquisition. In addition to achieving the medium- to long-term targets, we have set our sights on a long-term goal of reaching 30 million accounts, comparable to those of megabanks, and deposits of ¥30 trillion, second only to megabanks.
  • Digital shift advances in the Japanese banking industry
  • Low customer acquisition costs already achieved by leveraging the Rakuten Ecosystem (Rakuten Points, brand and recognition, mutual customer referrals among Rakuten Group companies, etc.)
  • Services and apps with excellent UI and UX backed by advanced in-house systems development, maintenance, and operating structure
  • Inexpensive services with high customer satisfaction backed by efficient and low-cost operations
(2) Earnings Power Enhancement
  • Increase revenue from loan interest and fees by expanding individual and corporate customers
  • Increase investments in securitized assets utilizing our trust facility
  • Expand product lineup following home loans, card loans, reverse mortgages, etc.
  • Expand middle-risk assets under management based on appropriate management
(3) Expand middle-risk assets under management based on appropriate management
  • Expand growth opportunities by deepening cooperation with Rakuten Pay to make personal accounts the main, further activating the customer base by promoting the acquisition of corporate accounts, and cross-selling through highly frequent touchpoints
  • Improve the accuracy of screening and marketing through leveraging we and the Rakuten Group data and AI, while expanding advertising business and new businesses by utilizing Bank App page views
  • Create new revenue opportunities through collaboration with BaaS platform partners
  • *1 Total Addressable Market.
  • *2 As of April 1, 2022 (provisional estimate). Ministry of internal Affairs and Communications (https://www.stat.go.jp/english/data/jinsui/tsuki/index.html).
  • *3 Cumulative number of Rakuten IDs where members logged in at least once after membership registration (excluding members who cancelled their membership). Includes individuals with multiple membership IDs. One ID can be used for the most of Rakuten services.
  • *4 Includes corporate accounts.
  • *5 Japanese Bankers Association. As of March end 2022 (preliminary results).
  • *6 2020 Calculated as JPY 19.3th of B-to-C EC market scale divided by 8.08% of B-to-C EC ratio based on Ministry of Economy, Trade and Industry "FY2020 E-Commerce Market Survey" (https://www.meti.go.jp/english/press/2021/0730_002.html).
  • *7 Yano Research Institute Ltd. "Domestic Cashless Payment Market 2021" released on April 20, 2022. (The figure shows domestic payment market size in 2020, which is the total amount of payment transactions through cashless payment methods including credit cards, prepaid cards, debit cards and mobile carrier charges, etc.)

To achieve the goal of business expansion, we will promote a three-pronged initiative integrating “customer base expansion,” “earning power enhancement (expanded revenue from loan interest and fees),” and “capturing growth in the FinTech domain.”

We listed on the Tokyo Stock Exchange Prime Market in April 2023 to allow for a more autonomous management perspective, execution of growth strategies, and consideration of various growth and financial strategies, including independent financing.

Bank targets, plans, estimates, projections, forecasts, and other forward-looking information contained herein reflect our judgments or beliefs at the time this information was prepared. Actual results may differ materially from those contained herein or the contents inferred from this material due to domestic and international economic conditions, corporate trends, or competition with other companies, among other factors.

About the Rakuten Bank, Ltd. Medium- to Long-term Vision (Japanese only)(PDF: 318KB)