In April 2021, Seven Bank’s 20th founding anniversary, the company announced a new Purpose. We asked President Funatake about the bank’s past and future as a next-generation bank that continues to change, all while carrying and passing down the customers’ wish of “having an ATM in a convenience store” ever since the time of its establishment.
（Interviewer: SMO Mikiko Saito）
Saito: Seven Bank established Purpose in 2021 and is in the process of becoming a stronger brand. What was the brand image when you joined the company?
Mr. Funatake: At the time, the company was called IY Bank. Although it was a "bank," it had an image of operating ATMs at convenience stores. However, it was also Japan’s first bank founded in the 21st century, and I had the image that it would be a bank that is constantly doing new things.
Saito: Do customers still perceive Seven Bank as a new bank?
Mr. Funatake: I am often told by people outside the company that "you are taking on new challenges and doing many things even within the bank," for which I am very grateful, but on the other hand, I have the feeling that maybe we are not as good as we are told. 20 years on, there is a sense of stagnation throughout the company. I’m worried that our vitality may have declined a little compared to when Seven Bank was founded.
Saito:Taking on various new challenges - what exactly do you mean?
Mr. Funatake: One is to make ATMs a multifunctional terminal of contact with the real world in the digital society. For example, we have made it possible for customers to apply to use their My Number Card as a health insurance card; we are also experimenting with facial recognition for identity verification using the ATM's high-performance camera. We hope to leverage ATM functions to address digitalization in government and healthcare. Today, a variety of transactions can be made with a smartphone, but there are many people who would have trouble if they could only make transactions with their smartphones. We want to show society that it is important to have trading options other than smartphones.
I believe that this will lead to a sense of security and safety for the service itself, which in turn will lead to the creation of a safe and secure society.
Saito: Do you mean choices in the real world rather than the virtual world?
Mr. Funatake: Yes. It may seem like we’re going against the times, but I think it's okay for some people to go in a different direction than everyone else. I would like to try to think in such a way that all transactions that can be done with a smartphone can be realized with an ATM.
Saito: Why did you decide to set a Purpose?
Mr. Funatake: Until now, we have been concentrating on the ATM cash business, but amidst the drastically changing environment, there is a strong sense of crisis as to whether we can survive only in the conventional business, and we feel that we must respond to the changing times and "diversify our business.” We will take on a variety of challenges that are not bound by conventional ideas, and it is precisely in times like these that we need a core that we must not lose, an axis of ideas, and a philosophy that will serve as a basis for decision-making, no matter when or where we find ourselves.
Saito: I think you've taken on a lot of new challenges before, but have you made decisions and taken actions based on your formulated Purpose?
Mr. Funatake: We do so consciously. In fact, we are now creating a (fictitious) "customer table" at our management meetings. We are always aware that our customers are watching us, and we all check and discuss with each other whether or not our services exceed their satisfaction.
Just recently, at a management meeting, there was a situation in which final decisions were made on the development of new services and the review of existing businesses. Although we had carefully considered the matter with various people, we were not convinced that we could exceed our customers' expectations, so we decided to start over and ordered a reexamination. I think this was easy to do because we had a Purpose set.
Saito: There was Purpose as a base there. I'm sure this is what makes the company recognized as a brand that keeps doing new things.
Mr. Funatake: I think we still need to penetrate the market, but looking back, most of the services we provide through our ATMs are Japan's first innovative ones. When I think about it, I feel that the decision-making process that led to setting this Purpose has been working from the past.
Saito: What do you think will happen to the financial industry and the environment surrounding Seven Bank in the future?
Mr. Funatake: In order for banks to survive in the future, they will need to have great originality regardless of whether they are big or small banks. I think our company will probably have to be that latter and survive by creating several new businesses with uniqueness in ATMs or even outside of ATMs. We are calling it "ATM Plus (+)," which is different from the conventional ATM, and we want to create a world where several pluses are embodied.
Saito: It's a brand that is truly one of distinction and chosen by the customers.
Mr. Funatake: Mr. Suzuki, the founder of Seven-Eleven (now Honorary Advisor to Seven & i Holdings), always said, “Create something new that the world is not doing.” In 2001, customers said, “I wish I could withdraw money at a convenience store,” and the current ATM business started. Mr. Suzuki also said, “If customers don't need ATMs in a cashless society, we don't have to be so concerned about them.” It means that service providers should always keep creating something new, something that will be welcomed with surprise by customers. I think that’s right.
Saito: The challenge to try new things is not only in the DNA of Seven Bank, but also in the DNA of the entire Seven & i Group, isn't it? When I spoke to someone in the convenience store industry once, he said that 7-Eleven is not only one round, but two rounds ahead.
Mr. Funatake: I think that's right. I think what managers need to do is to keep saying, “Don't be bloated with pride of the status quo.” I also tell everyone not to be bloated with pride of what they have built up in the ATM business so far, but to always try to create new value. But while it may sound as if such statements are valued only by those who are engaged in new business, the people who are steadily working on their business every day are the ones who support the company. It is also very important for those people to do the same thing properly every day. However, I tell them to sort out the things that have become outdated and do them while cleaning them up.
Saito: What kind of internal vision do you aim for at Seven Bank beyond these reforms?
Mr. Funatake: Until now, in Japan’s rapid growing economy, when you came to the office, you had all sorts of useful tools, and they were ahead of the stuff you had at home. Desks, computers, printers, and stationery were all better at the office. At some point, however, home and private life became more technologically advanced. What I’m saying now is to make it possible for everyone to do what they do on their smartphones at home, at work.
Saito: Does that mean you don't have to come to the office and instead work anywhere?
Mr. Funatake: In our work style reform, we are not telling people to go to work or work from home at all now so that they can work in a way that is not tied to any place.
However, if you only work from home too much, it will be difficult to explore knowledge, so it is also difficult to find a way around this issue. I think we need to do something consciously to communicate both within the company and with the outside world.
Saito: Is there anything that you personally do to explore knowledge or to connect with new things?
Mr. Funatake: It’s simple, but I read books. I also try to meet people as much as possible. Especially for young people, I want people to be curious, meet various people, read a variety of books, and explore new knowledge.
Saito: Many of Seven Bank's employees are curious and imaginative, aren't they?
Mr. Funatake: There may be many serious and quiet people. From my point of view, I would like them to have a little more curiosity and imagination.
The Seven Labs organization attracts people who are full of curiosity and imagination, and we encourage them to go out and work. It’s interesting to let them experiment here, but when it comes to actual work, it is often constrained by risk management and business procedures, and the corners are gradually rounded off and it often becomes something plain and ordinary. That’s the difficult part.
Saito: There is also the legal barrier of the Banking Act, and Google and Apple will probably enter the financial industry in the future. It seems technically possible to come in, but from your point of view, how do you think they will be able to break through the barriers in Japan?
Mr. Funatake: In Japan, the number of operations that can only be done by banks has decreased.
By law, banks have three typical businesses: the deposit business, loan business, and exchange business. However, these can now be done without being in the banking business. The only one that is still protected as a bank-only feature is deposits.
So, it’s not so much what you can do if you are not a bank, but rather what you cannot do because you have a banking license. We can't try to have travel or healthcare business under our jurisdiction, but Rakuten and PayPay can.
Saito: Do you see any possibility for Seven Bank to collaborate with a completely different industry in the future?
Mr. Funatake: In a sense, we’ve been collaborating all along. Our ATMs have become indispensable recharge and withdrawal bases for electronic money such as PayPay, pring, and Merpay. In the world of ATM Plus, we are considering the use of ATMs as a convenient channel that does not involve the deposit or withdrawal of money. This is what I was talking about earlier, such as making identity verification possible at ATMs. Recently, recycling and reusing are becoming more and more widespread, but payment for the acquired items cannot be made unless the customer's identity is verified. There are many places where such identity verification is done online, but I think it would be convenient if ATMs can conduct identify verification with the person’s face and My Number Card. Once their identity is verified, then the payment can be made at that moment. We have also started an experimental service where hotel guests can automatically check in in advance at ATMs using facial recognition.
Saito: That’s infrastructure. Creating a digital gateway to the real world.
Mr. Funatake: That's right. If you wanted to, you could probably conduct all your transactions on your smartphone. However, I think people and society would be more stable if there were a variety of options available, rather than a society where you can only do things on your smartphone. I think it is important for people, even those who are used to using smartphones, to be able to use smartphones and ATMs according to their own convenience, and to be able to decide that for themselves.
It’s better to have a diverse range of options available, as I believe it stabilizes society as a whole and people feel more comfortable using any of them.
Saito: Finally, what do you consider to be "real thing" that you would like to pass on to the future?
Mr. Funatake: I think it’s to not imitate others. It’s not a rehash, but something unique, something we’ve created ourselves, or something that cannot be found anywhere else. In that sense, I think Seven Bank has always created the “real thing.” Going forward, I would like to continue our efforts to go beyond "what customers wish they had" and create something unique that others cannot imitate.
Yasuaki Funatake
Seven Bank, Ltd. President & CEO
Mr. Funatake entered The Long-Term Credit Bank of Japan, Limited LTCB (now Shinsei Bank, Limited) in April 1980, then in December 2001, he joined Seven Bank, Ltd. After working in positions including Business Development Manager, Head of the Business Development Department, Executive Officer, he became the current President and CEO. His motto is “Life is a repêchage.” He believes that what you learn from failures is important. He likes to move his body, such as through taking walks, swimming, and doing hot yoga.