Message from the President

The business environment surrounding Seven Bank has been changing dramatically. With the continued advance of digitalization, conventional financial functions are segmenting, growing more sophisticated, and becoming seamlessly connected, which is accelerating the reorganization of the financial industry at the global level. People’s lifestyles and values have also changed significantly as a result of the COVID-19 pandemic. There is no doubt that in society the roles expected of financial institutions and the functions required of them will increasingly change. During such a major transition period, what is important is how well we will anticipate the needs of customers and provide fresh and unique services and functions, which means transcending the traditional bounds of finance.

In that context, as announced on April 6, 2023, we have decided to acquire a stake in Seven Card Service Co., Ltd., a Seven & i Group company, and make it our consolidated subsidiary. Integrating nonbanking with conventional banking and exploring synergy between the two spheres will enable us to provide consistent and coherent services and finance experiences aligned with customers’ needs. I look forward to making use of the know-how and expertise built up by both companies to reorganize our various financial services from a customer perspective while also utilizing findings from 7iD, our Group-wide customer base, to develop financial services suited to a distribution and retail group and provide unique customer experiences.

What I have consistently striven to do ever since I first joined the Bank is think from the customer’s point of view and to tackle new challenges. This is what I have learned from Seven-Eleven. Financial services are subject to very strict regulations and guidelines, and the industry’s conventional wisdom is associated with them. There have been cases being left to stand that have needed to change in order to respond to changes in the times and advances in technology. However, as a financial institution rooted in retail ways of thinking, Seven Bank has focused on always seeing things from the customer’s point of view and providing what customers truly want.

Our ATMs are one result of this. At the time, there were no services that allowed deposits and withdrawals to be made with cards from various financial institutions at a single ATM. The conventional wisdom in the industry at the time was to limit deposits to one’s own bank because of the complexity involved in processing banknote jams that would sometimes occur when money was deposited. Overturning the conventional wisdom to put highest priority on customer convenience, we tackled a host of challenges, including developing new technologies, creating a remote response scheme, handling charges for various code-based payment methods, and accommodating Individual Number Cards, and as a result today we have over 26,000 ATMs nationwide and have grown into social infrastructure that handles over 900 million ATM transactions annually.

What’s more, customers of Seven-Eleven expect to be provided with new products and services for more enriching, more convenient lifestyles. As a member of the Seven & I Group, we must accurately grasp the needs of customers and meet their expectations on a day-to-day basis, and we must continue to take on new challenges to this end.

One recent example is our Smartphone ATM service. Through use of a smartphone app, customers can deposit and withdraw cash at Seven Bank ATMs even without a card. Smartphone ATM was a groundbreaking movement that came out of changes in the lifestyles of our customers, and it had a major impact on the industry. Our long-term goals going forward are to create the next new movement and have it spread throughout the industry and also to contribute to promoting digital transformation (DX) in Japan. We recognize that these are very lofty goals, but we intend to move our business forward guided by this vision.

Seven Bank has been carrying out its Medium-Term Management Plan (FY2021 – FY2025) since fiscal 2021. Under the plan, we have a goal of realizing a second stage of growth by seizing the opportunities from changes in society, and to achieve this goal, we have three main focuses: growth strategy, contribution to solving social issues, and corporate transformation.

In the plan’s first year, in a difficult environment marked by economic stagnation from the pandemic and the further advance of cashless payment, consolidated ordinary income was ￥136.6 billion and consolidated ordinary profit was ￥28.2 billion. Both income and profit declined year on year but were in line with the plan. Fiscal 2022, the second year of the plan, we are projecting consolidated ordinary income of ￥149.0 billion, but we will also continue investing with a view to our next stage of growth, so we are putting consolidated ordinary profit at ￥28.0 billion. The difficult environment is expected to continue for the time being, but by focusing on realizing an “ATM+” world that seeks to create new value, on financial services that pursue unique products and demonstrate synergies with the Seven & I Group, and on the overseas business, which will establish a dominating presence in three countries overseas, we will steadily increase the topline and by doing so work to achieve ordinary income of ￥170.0 billion in the plan’s final year. To this end, one of my missions is to promote DX and more active use of data strategically.

In our domestic ATM business, which is our solid income base, the number of ATMs is continuing to increase due to replacement of ATMs by financial institutions and demand from train stations, airports, and commercial facilities. In addition, various initiatives are underway to build an ATM+ world that transcends the conventional concept of an ATM as a cash platform, with personal authentication, for example, and services linked to Individual Number Cards. For financial institutions, we have started an initiative in which personal authentication via facial recognition at ATMs is used to meet needs such as account openings, changes to notification items, and ongoing customer management.

Moreover, we have started to work with regional governments on providing a service that allows people to receive government benefits through our ATMs anytime, anywhere and without the need for a bank account. This is currently being implemented as proof of concept for benefit payments from Kakogawa City in Hyogo Prefecture utilizing the Individual Number Card and benefit payments made by Shibuya City in Tokyo in connection with its childbirth grant program. With regard to DX for administrative services, the value of ATMs is being reaffirmed as a concrete example of a type of user interface that leaves no one behind. And with these, we will work to further expand the value provided by ATMs as a new social infrastructure that is close and convenient, and reliable and safe.

In the financial services business, we are planning to continue increasing the number of accounts and use of personal loan services. Moreover, we will work steadily to expand and enhance our service menu, including the securities brokerage services which we launched in fiscal 2022. The tie-up with Seven Card Services will also line up the multiple means of payment, operation, and procurement sought by personal customers within a coherent promotion framework, enabling us to respond to customers’ diverse needs more easily, seamlessly, and quickly.

In our overseas business, which is a growth field, it will be important for us to expand business quickly and consistently in the United States, Indonesia, and the Philippines, where we have already established services. At FCTI, Inc. in the U.S., we will start to diversify services in the same way as Japan while working to increase operational efficiency. In the meantime, at PT Abadi Tambah MuliaInternasional (ATMi) in Indonesia and PitoAxMPlatform, Inc. in the Philippines, we are aiming to increase ATM installations, further stabilize operations and increase the number of transactions.

Seven Bank has positioned the promotion of sustainability as the basis for its management strategy. We have specified five material issues that the company as a whole, will proactively work on solving environmental and social issues through business activities. We believe that providing safe and secure payment infrastructure through approximately 40,000 ATMs globally is connected to the resolution of social issues because such services provide the infrastructure as a solution to meet people’s various cash-related needs.

We are also involved in multifaceted services for foreigners living in Japan so that Japan comes to be recognized as highly livable for everyone. These include an international money transfer service that can be used easily from a smartphone app, and in addition, credit cards and purpose-specific loans for foreigners living in Japan. Going forward, we will consider expanding services in response to the needs not only of foreigners living in Japan but also foreign travelers visiting Japan, who are gradually increasing, and through this work to realize multicultural symbiosis.

Seven Bank is a supporter of the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and is actively working to tackle climate change. With every new generation of ATM, energy consumption is cut substantially, and by reducing the frequency of ATM cash transportation as well, we are reducing CO2 emissions from the transport process. Moreover, we plan to procure renewable energy for all the electricity used by data centers that will be the foundation of our new system platform. In this way, in collaboration with Seven & I Group companies and our various partners, we will contribute to solving increasingly serious environmental problems.

To accelerate transformation of both organization and business model/process as one of growth strategies, we will continue promoting the Corporate Transformation (CX) Project. Companies must change to adapt to the social environment, and this project aims to transform the company focusing on “human resources, organization, and corporate culture” and “data-driven business models and processes” with a view to changing employee mindsets and evolving technologies. For a new movement, we need to create an environment for all employees can learn the latest technologies and also privilege to use diverse sets of data to promote operating efficiency or develop new products and services. However, technology is not everything. It is always important to think from the customer’s point of view. Rooted in this idea, utilizing diverse data and cutting-edge technologies while maintaining our specialization and high level of quality which are always required as a bank will help give us a strong competitive advantage. To this end, we are engaged in hybrid personnel reinforcements and organizational reforms to improve IT literacy in-house while also acquiring outside IT professionals with extensive experience and skills.

In addition, we have a team called Seven Labo that promotes innovation company-wide with its antenna up to changes taking place in society. Seven Labo acts quickly and flexibly beyond organizational demarcations to promote a variety of projects, and we would like to integrate this mode of organizational operation into the rest of the company. Like a Holacracy-style organization, we are aiming for organizational operations that are flat, without vertical relationships, and with strong emphasis on individual autonomy.

Developing unique services using the latest digital technologies, it is essential we further enhance our skills in data analysis and usage. Actually, in Indonesia, we use AI to select installation sites, and currently around 20% of ATMs have been placed at sites selected via AI. In order to fully integrate data-based business processes such as this, we launched a new organizational unit in April 2022, the Data Management Office (DMO). The office not only collects data departments want to use and provides data it has rendered visually, but it also works to ensure the security of data assets. Through such initiatives, we are aiming to firmly establish a data-driven culture at our workplaces.

There are three key values when I run the company: Designing for total optimization, defining “Why” for encouraging empathy, facing with what society faces

When designing new services, there is a tendency for optimization to be in the department that is responsible. The ideal though is ongoing overall optimization with outsourcing partners and continual reconfiguration of DX design in line with the times. In the case of designing new services, an agile approach to development has become essential in which after a service is launched issues are promptly grasped and immediately resolved while upgrades are made on an ongoing basis. It is important to design the entirety including data optimization for grasping various phenomena from the development stage. We will constantly and flexibly meet customer needs and develop data-driven services that are seamlessly linked with the businesses of other companies.

Based on past experiences and successes, I think empathy is the most powerful driving force. By initiating new services that contribute to society and forming alliances with vigorous startups, a passion begins to burn in your heart, and when that happens, it becomes an incredibly powerful force. To collectively mobilize your colleagues and become a major force together, empathy management is important. Accordingly, instead of a top-down approach, each individual employee at the workplace questions themselves- “Why is this job necessary?” “How does this contribute to society?”—and then this is tied to output. In this way we will create an organization that allows for passionate discussion and debate with colleagues.

Generally, there is a tendency to think of service levels to meet standards of one’s own department, company and industry—those organizations to which you yourself belong. With the industry reorganizing and DX accelerating, however, the comparison should not be with the organization or industry to which you are affiliated. What is needed are ideas or inspiration that create the industry’s new conventional wisdom, and this is done by grasping changes in society and its needs yourself and taking an approach that did not exist previously. Based on our own past experiences, unraveling an industry’s conventional wisdom strand by strand can not only improve convenience for customers but also generate new value for society. In this sense, an industry’s conventions are a treasure trove of innovation. Questioning the conventional wisdom and sincerely facing up to societal changes and customer feedback leads to the creation of innovation.

As a member of Seven Bank from the time of its founding, I have tackled various challenges to contribute to its growth. Society, however, is constantly changing. We will continue to create the future ourselves based on the same approach of discarding previous successes, questioning the conventional wisdom, and making changes.

In the future, in 2050, the environment surrounding convenience stores and banks will have changed, and the way people shop and the nature of financial services, too, will have no doubt changed greatly. To enable Seven Bank to continue to serve as social infrastructure that is close and convenient, reliable and safe in this age to come, we will get on track of our second stage of growth in line with our current Medium-Term Management Plan and make the utmost effort for further sustained growth and higher corporate value.

Going forward, we will continue striving to fulfill the Purpose and to meet the expectations of all stakeholders, from customers and suppliers to business partners and employees. Thank you for your continuing support.