Celent has released a new report titled Legacy Modernization in the Japanese Banking Industry Part 2. 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. The previous report spans the financial industry with an analysis of the results, key feedback from interviews, and the overall implications of legacy modernization trends across the industry.

This new two-part report 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.

“Industry players should be ditching vertically integrated direct sales or so-called keiretsu, which are tantamount to direct sales routes, and be establishing delivery models that are more dynamic and open. Omnichannel initiatives are an opportunity not just to launch or shut down these channels, but rather to revisit and reconsider their optimal delivery model. Moreover, collaborating with non-financial sector players including startups could open the door to vast market frontiers,” Yanagawa commented.

“In the banking services value chain there are areas where firms can and should go it alone to generate their unique in-house high value-added services and products, and other areas where they stand to benefit by collaborating with other firms to drive down costs. Also, if firms thoroughly consider economies of scale and economies of scope, they might be able to parlay their cost centers into new profit centers and play a role in the industry infrastructure,” he added.