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Customer Centricity through Collaboration: Mizuho’s Path to Digital


This Japanese financial services firm has achieved global digital megabank status by leveraging the latest tools, developing fintech partnerships, nurturing a collaborative culture and disseminating customer-oriented innovations to relevant areas of the business.

Mizuho Financial Group is a large Japanese financial services organization with $1.8 trillion in assets under management. Our group’s business is spread across the globe, with a presence in 38 regions, and boasts of a robust customer base, fortified by a deep understanding of our customers, developed on the strength of a rich information base built over time. 

A few years ago, however, we realized that sitting on our historical strengths wouldn’t be enough to remain a leader in the future. We therefore began modernizing our retail banking group by focusing on technological innovation brought about by advanced digital technologies. 

We started with a strategy whose objective was to enhance customer service and establish Mizuho as a digital-age megabank. The main technologies we chose to drive our digital transformation strategy were blockchain, big data analytics and AI. The strategy’s success pivoted around partnerships with fintechs and other vendors, as well as the establishment of a business division whose sole purpose was to develop and drive innovation across the group’s businesses.

Until recently, established banking regulations1 limited financial institutions’ fintech voting rights to 5%. When this barrier was dismantled in 2014, the door was opened to innovation driven by new-age technologies developed by digitally-native companies. This regulatory change empowered financial institutions to invest in fintechs in order to set up financial IT companies to advance their digital transformation initiatives.

On the economic front, our topline strategy was built on a healthy spread between lending and deposit rates. A decades-long ultra-low interest rate regime and reduced demand for lending services placed an enormous challenge on us to have the capital needed to invest in digital innovation. As a result, we focused on cost reduction and innovations that would make our products and services more appealing to customers and to enhance satisfaction through digital channels.

Institutionalizing the Push Toward Digital

Prior to 2015, the organizational unit set up to drive digital innovation was in the form of a project team. Upon my arrival to the digital innovation team from a branch banking role in 2015, I moved to set up a digital strategy incubation project team as an independent unit within the Mizuho group. 

Mizuho group’s businesses are organized as companies by customer segment. This structure called for an institutionalized approach to transferring the digital project team’s transformational innovations to the various businesses within the group. To support this, we reorganized the team into a digital innovation department to develop and drive digital technology-powered innovations across the group’s businesses. 

In 2017, we created the role of chief digital innovation officer (CDIO), who is charged exclusively with the agenda of driving digital innovations. This practice differs from those of similar types of banks that combine other tasks and responsibilities with this role. In our case, the role has the sole purpose of driving digital in a significant way.

We take a two-pronged approach to managing digital development and deployment. One, the digital innovation department gets involved with the business department that is creating the proof of concept (POC) to determine how the innovation can support new ways of doing business. Two, we identify opportunities to address difficulties and challenges confronted by the business lines that can benefit from innovative digital solutions, and then build appropriate solutions.

Winning through Fintech Collaboration

In October 2016, we set up a laboratory to drive open innovation through our association with fintechs. The lab combines our deep expertise in financial services with the technological prowess of fintechs, which are focused exclusively on technological innovation and can speed time to market of new applications driven by digital technologies.

It is important to propagate the technology and ideas we sourced to the entire group. While doing so, we’ve also been able to disseminate the behaviors and atmosphere that help to inculcate a new culture and way of doing business across the group. For example, our FINOLAB, which is situated next to our Otemachi head office, is set in a laboratory-like environment, where venture companies staff our digital innovation department. Meanwhile, other partners pursue digital innovations by actively engaging among themselves. 

The lab applies contemporary practices such as Agile development methods and design thinking principles, while enabling individuals to network with other experts, fostering an innovation culture. FINOLAB offers an open, collegiate environment that fosters a flow of ideas among individuals from not just different units but also from external entities. Unlike a traditional Japanese company, it is more akin to a network-based graduate school laboratory or a lab within a Silicon Valley start-up.

We’ve worked closely with fintechs to improve the user interface (UI) and user experience (UX) aspects of our customer interfaces. At an applications programming interface (API) level, systems functionality is provided by the bank, but the UI is provided by our collaborating fintech start-up. The initiative significantly improved the customer experience from the use of improved UI and UX.

On the business front, fintechs typically lack customer relationships. As financial institutions join hands with fintechs and collaboratively offer customer services, customer ownership is likely to emerge as an issue. Customers are more comfortable dealing with a trusted bank. Mizuho intends to guard its ownership of customers by carefully balancing its fintech partnerships. In the early stage of these partnerships, it remains to be seen how they will evolve and lead to new sustainable business models.

Our Three Digital Levers: Blockchain, AI and Big Data

Blockchain, AI, and big data analytics are the core digital technologies that we chose to focus on to drive business results:

  • A partnership with Metaps and WiL. This collaboration has led to our new financial settlement service offering using digital wallet technology. Targeting smartphone users, the service analyzes customer payment behavior via AI-based algorithms and provides contextually relevant advice. This value-added service goes beyond existing bank settlements for utility payments or settlements using credit cards.

  • Big data analytics and AI-based lending services. In association with SoftBank, we launched a company called J.Score, which – starting in September 2017 – renders score-based personal lending services. The company makes use of big data and AI to power its innovative services. Customers enter their basic financial information such as lifestyle, smartphone utilization, Mizuho bank financial information and user profile, and the bank’s AI-based systems then analyze their data and provide lending scores. Based on the score, customers can see what their potential interest rate would be. The rate is generated entirely through an AI-based mechanism, obviating the need for face-to-face discussion with a human being.

  • Leading with blockchain. We are applying blockchain thinking and technology to develop a solution for sharing sensitive documents among the group’s worldwide subsidiaries. Our initial tests using blockchain show that the approach could enable the bank’s subsidiaries to tokenize internal money transfers, eliminating the need for cumbersome and manual data reconciliation. Our trials confirmed that blockchain can create an effective platform for information sharing among multiple group companies, resulting in potential cost savings and enhanced usability. The solution was designed using Ethereum for smart contracts, BigchainDB for decentralized storage and InterPlanetary File System (IPFS) for decentralized file transfer. In addition to meeting the business need, the project helped us understand how to leverage the different strengths of platforms to build an overall solution. (For more on this topic, see “Financial Services: Building Blockchain One Block at a Time.”)

    In April 2017, we announced our intention to use Corda, the open source distributed ledger platform developed by industry consortium R3, to digitize trade documents such as letters of credit and bills of lading. The goals are to reduce fraud, optimize the speed and efficiency of transactions and enhance visibility for all parties involved in trade finance.

    We are undertaking a J Coin2 initiative in collaboration with external entities through the use of shared infrastructure and expertise. Employing the model of shared resources tends to drive down the costs involved with embracing new-age technologies, resulting in a win-win scenario. The Financial Services Agency (FSA), the regulator of financial services in Japan, is encouraging the use of shared technology models like blockchain for the benefit of all financial institutions.

  • Reaping advantage with robotic process automation: As part of our endeavor to extend digital into our branches, we’ve also launched AI-powered humanoid robots that assist our customers in areas such as account opening and analyzing insurance coverage.

Our Outlook

The rise of new-age digital technologies also poses the threat of disintermediation of incumbent financial institutions such as ours in the areas of settlement and lending. Tax regulations, for instance, and the need to evolve our business to accommodate our new digital platform based-lending businesses are key challenges. While there may be changes in how we acquire customers in the medium term, in the long term only those financial institutions that sustain businesses with low margins will remain viable.

The utilization of robotic process automation (RPA) and AI is a primary focus area for us today, based on the level of expected benefits. Our RPA experts are analyzing routine business and IT processes throughout the organization to identify areas for automation. These successful initiatives are leading us to build many automated processes throughout the Mizuho bank businesses.

We are working with various partners to launch a company called Blue Lab to stimulate revenue growth and reduce operating costs. Blue Lab’s goal is to add 100 billion in added value by around 2020 through cost reductions, increased profits and the value of the new ventures. We want to create a business that will impact the profits and losses of the group in at least two or three years, including the creation of new business and enabling them to provide various levels of industry support.


1. The Banking Act was amended in 2014, relaxing limitations on holding of voting rights by banks in other companies.

2. Motonao Uesugi and Koji Okuda, “J Coin: Japanese Banks’ Virtual Currency without the Volatility,” Asian Review, Sept. 17, 2017,


Nobuhisa Abe is General Manager of the Digital Innovation Division at Mizuho Financial Group, Inc. He joined Mizuho Bank in 1992, after which he moved to the Mizuho Financial Group’s Corporate Planning Department as Senior Manager. He has also been General Manager of the Nagano Branch of Mizuho Bank, and General Manager of the Incubation Project Team. He has a bachelor’s of engineering degree from Osaka University. 

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Customer Centricity through Collaboration: Mizuho’s Path to Digital