Legacy Modernization in Japan’s Financial Industry, Part 2: What the Auto Industry Can Teach the Financial Sector
Japan’s financial industry is transitioning from considering modernization to implementing it, and what industry players require most right now is a methodology for legacy modernization.
This report delves more deeply into the current state of legacy modernization in Japan, provides an in-depth analysis of the survey results, and considers likely directions for the future.
As a corollary, the report explores the evolution of the auto industry, distilling lessons from it for Japan’s financial industry.
The automobile industry was the proving ground of the most significant and world-changing innovation of the last century, and has continued to reinvent itself. Celent believes that modernization in the auto industry embodied the following characteristics.
- The supply side and demand side developed in tandem. At the same time that the production process evolved to improve productivity, quality, and efficiency, the industry created new consumers and new ways of consuming, and changed the way people live.
- A single model soon gave way to a full line of products and services, mandating that supply side firms (producers) not only devise sales strategies but also overhaul their cost structures.
- In order to control production and marketing, sales channel reform was not enough, and a flexible production line (core system) was required.
“Even today, cars are rapidly being transformed from something concrete, like an advanced industrial product, to something more abstract, like a safe and comfortable means of mobility,” says Eiichiro Yanagawa, a senior analyst with Celent’s Asian Financial Services practice and author of the report. “This history has been driven by disruptive entrepreneurs, from Daimler in the 1880s and Ford in the 1910s to Sloan in the 1920s and Taiichi Ohno in the 1950s.”