Celent has released a new report titled Legacy Modernization in the Japanese Banking Industry Part 1.The report was written by Eiichiro Yanagawa, a Senior Analyst with Celent's Asian Financial Services practice.

This report examines the current status and a future direction of legacy modernization in Japan’s banking industry. It is based on a legacy modernization survey Celent conducted in 2015. The survey targeted mega banks, regional banks, entrants, and other financial institutions.

This new two-part report is an extension of this work that narrows the focus to the banking sector. Part 1 offers an overview of the state of modernization in the industry. Part 2 builds on this to offer policy prescriptions and suggestions for industry players.

“Mergers in Japan’s banking industry have driven a shift in resources to major banks, and spurred consolidation among small and medium-size financial institutions. The importance of strategy in finding the appropriate scale and range is only increasing, and this is true across the board: in marketing, customer service, development of new products and services, risk and cost management, and across all IT use,” Yanagawa commented.

“Financial institutions will not be able to survive by following past approaches. If regional and local financial institutions that cater to small and medium-size businesses are to remain going it alone on a small to mid-tier level in sectors dominated by major banks, then a unique strategy will be crucial," he added.