A UK Solution at Financial Information Technology 2016

Japan Open to Innovation in Financial Information Technology

Financial Information Technology (FIT) 2016 was held over a two day period at Tokyo International Forum.

The halls were buzzing as attendees circulated around the booths, looking for the newest developments in financial technology for the banking and finance sector.

The exhibition hall seminar rooms provided a platform for exhibitors to present their hardware and software solutions, and pitch to key industry contacts and decision-makers.

Exhibitors included big names like NEC, Hitachi, Docomo, Mizuho, Microsoft, NTT Data and Unisys.

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A Scottish Company’s Solution for Japanese Banks

Edinburgh-based Koirala Associates Limited (KAL) is a UK company offering Japan a cost-effective solution to accommodate the rising needs of cash withdrawal by visitors to Japan.

KAL currently runs operations globally in 80 countries including Japan.

Its customers include Citibank Global, ING Europe, Unicredit Europe, China Construction Bank, Westpac NZ, Banque Populaire France, and Banamex.

China Construction Bank has the biggest ATM network at this time, with 90,000 ATMs across the country.

KAL has been doing business in Japan since 2004. Shinsei bank runs KAL software on its ATMs, which are provided by OKI, Hitachi, and Fujitsu. KAL also cooperates with Japanese ATM vendors outside Japan too, such as NEC and Glory.

Traditionally, Japanese banks buy hardware and software from the same vendor – multi-vendor ATM software is not popular in this market.

An advantage of this is that ATMs will operate the same way if they have the same software.

However, the Japanese Government has made a clear statement that Japanese banks must support foreign cards, especially in view of the influx of foreign visitors to Japan.

Many of these changes must happen in time for Tokyo 2020 and other global sporting events that Japan will be hosting in the next few years.

Why Can’t Japanese Banks Accept Foreign Cards?

Sometimes the card reader technology and PIN pads are not suited to foreign cards.

Card readers are usually EMV (Europay, Mastercard and Visa) compliant, however on occasion they may need to be modified, which comes at a high cost, and it also may be impossible to upgrade depending how dated the technology is. The problem usually lies with the PIN pads.

The business case for banks to replace ATMs in Japan is not very good as the number of foreign transactions compared to domestic transactions is low.

KAL’s Cost-effective Solution

KAL’s solution to the dilemma is a machine called the KAL RTM.

RTM stands for Retail Teller Machine.

It is a machine that functions as a low-cost ATM.

It functions as a transaction processing machine, is EMV and PCI compliant, stores no cash inside but has the ability to dispense cash, can be used to deposit cash, and provides video-teller remote teller assistance via a webcam.

Once installed in a place where cash is already available, such as a bank branch or shop, it can start operating.

RTMs function exactly in the same way as any ATM, however, instead of cash the user receives a receipt, which they will then exchange for cash at a bank counter or cash register.

An RTM is a way of opening a small bank branch at a low cost, all across the country.

Shopkeepers help to complete transactions, and receive a commission as incentive.

Pros of Using RTMs

  • Designed to be used inside a bank branch, in a shop, or other retail location
  • RTMs are low-cost
  • Reduces branch costs
  • Allows expensive ATMs to be optimally used
  • Any shop can potentially be turned into a bank branch
  • The concept is that of a small bank branch in a box
  • The customer can receive video help if they get stuck
  • The customer experience is similar to that of going into a real bank branch

What Can RTMs Do?

  • Dispense cash
  • Deposit cash
  • Deposit cheques
  • Bill payment
  • Request bank balance and statements
  • Perform bank transfers
  • Assisted teller transactions are available by video
  • International card support
  • They also support domestic Japanese cards

The Future of RTMs in Japan

RTM machines are not operational in Japan yet, but can already be found in Malaysia, China and Australia, where there are differences in deployment.

In Malaysia for example, they are being used for payment for government services such as drivers’ license renewal.

KAL’s partner in Japan is NTT Data, and RTM machines are available in their showroom.

KAL is therefore in a position to deliver solutions with their partner.

The future looks bright for this Edinburgh-based financial technology software company.


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Article and photo by Vanessa Holden, October 2016.