By Kentaro Otsuka / Yomiuri Shimbun Staff Writer

Mitsubishi UFJ Financial Group Inc. on Tuesday announced it will establish a mobile-only bank in the second half of the fiscal year ending March 2027.

It will be the first Japanese megabank to launch a bank offering its services entirely via mobile application.

The move comes as a way to improve personal banking services, an area where competitors have already been focusing their efforts. The hope is that the establishment of the mobile-only bank will help give the holding company an opportunity to catch up.

As the new bank is free from costs related to operating physical branches, it can redirect those funds to raise deposit interest rates and lower commissions, helping to attract new customers.

Customers will be able to consult on asset management and other issues at physical MUFG Bank Ltd. branches. A system will also be jointly developed with its subsidiary WealthNavi Inc. that analyzes customer data using AI and proposes financial products tailored to life events such as marriage and childbirth.

"We are aiming for the new bank to become a peerless institution that combines the advantages of both the digital and the real," said Hironori Kamezawa, president of Mitsubishi UFJ Financial Group, at a briefing session to announce the company's strategy held in Tokyo on Tuesday.

Banks eager to acquire deposits

In the financial industry, companies such as Rakuten Group Inc. are expanding their "economic zones," in which their services of banking, securities and credit card are linked together, rewarding customers with points. Accounts of Rakuten Bank Ltd. has reached about 17 million â€" the figure has more than tripled over the past 10 years.

In 2023, Sumitomo Mitsui Financial Group Inc. launched an app called "Olive," which integrates banking and credit card services. This month, the holdings company announced a tie-up between its subsidiary Sumitomo Mitsui Card Co. and PayPay Corp., a major QR code payment company. "This will become a landmark coalition," said Toru Nakashima, president of Sumitomo Mitsui Financial Group.

Meanwhile, Mizuho Financial Group Inc. invested in Rakuten Card Co. last year to offer a credit card service that can accumulate Rakuten points. The holdings company also launched a service that awards "Mizuho points" to customers who designated their accounts to receive wages and pensions. It aims to enhance the usability of Mizuho points by making it possible to exchange them for Rakuten and PayPay points.

While banking institutions have been keen to attract individual customers, "life with interest rates" has returned to Japan after the Bank of Japan ended its negative interest rate policy in 2024, further increasing the necessity to acquire deposits.

Intensifying battle

The total number of new accounts opened annually at MUFG Bank and Mitsubishi UFJ Trust and Banking Corp. has decreased for 15 consecutive years since fiscal 2008. In response, Mitsubishi UFJ Financial Group on Tuesday announced it will launch a new brand for personal financial services called "M-tto" and deepen cooperation between its banking and securities services.

In particular, the holdings company plans to revamp the MUFG Bank app to allow users to check their credit card payments and securities asset valuations. The point redemption rate of the Mitsubishi UFJ credit card at partner stores will be raised to the same level of Sumitomo Mitsui's Olive. Mitsubishi UFJ Financial Group has also decided to launch an "M-tto points" system that will be rewarded to users through its services.

Kamezawa describes the holding company as a "latecomer." However, its entry into the market will likely intensify the battle for individual customers, already tense between various institutions, ranging from traditional megabanks to up-and-coming online-only financial institutions.

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This article is from The Yomiuri Shimbun. Dow Jones Newswires and The Wall Street Journal were not involved in the creation of this content.

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May 28, 2025 05:57 ET (09:57 GMT)

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