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Internet banking … but not as we know it

I was privileged to join a
presentation today from one of the best internet banks in the world:
eBANK, Japan. That’s a bold claim, but the only bank that comes close
to eBANK, for me, is the Bank of America and
that is because the BoA have 25 million internet users and over a
million mobile banking users.  In eBANK's case it's because they have
almost 3 million customers with each member of staff handling 15,000

Yep, 15,000 users to each staff member.

Here’s a brief profile of eBANK:

  • launched in July 2001;
  • 2.8 million accounts and ¥800 billion ($8 billion) in assets;
  • the largest internet bank in Japan;
  • no branches or ATMs (customers use the 25,000 Post Office and 15,000 7-11 ATMs); and
  • 195 employees.

Yep, you read that last bit right.

An $8 billion in assets bank, with almost 3 million customer accounts, operated by just 195 staff.

195 people in total that is.

15,000 accounts per staff member.

How do they do it?

Well, it may best be illustrated by their account opening process.

The usual account onboarding process requires a visit to a branch, a
bunch of documentation, a raft of form-filling, a lengthy process of
verification checking and authentication reporting under FATF and AML
rules, a little bit of KYC, a range of data entries requiring lots of
box-ticking and button-pushing, the production of paper and plastic
confirmations, final mail outs and more.

How does eBANK do it?

You go online and enter your information.

You take a digital photograph of your driving licence.

You mail the digital data up to eBANK.

Their OCR reads your driving licence data – name, address, birthdate
– automatically and then checks this against your data and public

As long as all tallies, it emails you back with new account details or asks you to clarify discrepancies.

No human hand involved.


In fact, it is even easier than that these days, as folks now do
this from their mobile phones and using a mobile is easier as the
digital camera is built into the phone – no messing about involved.

Talking of mobile, the bank allows customers to use the mobile to
control their bank access and verify transactions. You get text
messages each time your account is used, based upon personalised
settings. You can even lock your account from ATM withdrawals with your
mobile, and then unlock for five minutes as you enter an ATM location.
Almost like texting the ATM to say, “Hi, it’s me, I’m walking up to you
right now and I want to take out some cash, and it’s ok because it’s
really me”, then you just wave your phone over the ATM, enter your PIN
and you get cash.


In fact, the mobile side of things has revolutionised the eBANK
world because they used to be restricted to targeting internet users.
Now, they have many mobile internet users and, apparently, the mobile
internet user does not even realise they are actually using the
internet.  Mobile banking users just think of eBank as banking and
payments on their mobile telephone. The result is that eBANK has now
extended their reach far beyond the internet user to the general
population, because the general population all use mobile telephones
and just think of eBank as an application on their phone.

Wonderfully shocking.

The results are that eBANK has the major market share of any Japanese internet bank:

  • 51% eBANK
  • 35% Japan Net Bank
  • 12% Sony Bank
  • 2% SBI Sumishin Bank

with customer accounts doubling from March 2005 with 1.2 million accounts, through to March 2008 with 2.7 million.

The demographics of eBANK are:


  • 63% Male
  • 37% Female


  • 23% Under 30
  • 38% 30-39 year olds
  • 25% 40-45 year olds
  • 14% Over 50


  • 47% Professional workers
  • 5% Civil Servants
  • 9% Self-employed
  • 8% Part-timers
  • 12% Home-based Spouse
  • 9% Students
  • 10% Other

And the secret of eBANK’s success?

Better interest rates than traditional players?


Wide range of products and services?


Processes and operations built for the internet?


In fact, that last point is the point that I would make about eBank’s success.

eBANK purely exists as an internet bank, accessible via any
internet-attached device which, these days, is predominantly the mobile
phone. eBANK, because of this exclusive channel focus upon
internet-based banking, built a bank specifically to exploit this
channel. This is radically different to most banks that built internet
banking as an additional channel to exploit the existing bank.

Now I know we always go on about how banks add channels, and how
much easier it would be to just start afresh as a new bank, and yet
this could be the secret.

A bank built for a channel and unencumbered by historical thinking,
will not guarantee success but it is far more likely to be successful
than a bank that tries to add a channel on top of their historical
structures. The latter will always forsake functionality and usability
for cost, overhead and the straightjacket of legacies.

Meanwhile, how many other $8 billion banks do you know with less than 200 staff in total?


Like most internet-only banks, eBANK is challenged by profitability so don't take it as read that being a leader means being profitable.  However, with 2008's figures showing assets up from ¥522billion in 2007 to ¥810billion in 2008, and income up 33% over 2007, they are not doing badly.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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