Message to Shareholders and Investors

Since our founding in September 2007, we have pioneered numerous groundbreaking innovations in Japan.

Following my appointment as president in 2014, we have developed three businesses: Digital banking, BaaS (Banking as a Service), and THEMIX, through the use of advanced technologies such as open APIs, cloud, mobile, AI, blockchain, and security. For example, we have steadily grown through initiatives bringing about major changes in the industry, such as becoming the first bank^*1 to open up its API, and in the realm of mortgages, developing AI screening, a new agency business model, and “Kantan (Easy) Mortgage”, as well as launching the NEOBANK^®*2 business.

In the future, we will also focus on our platform business in order to make further progress as a tech company transcending the scope of banking. In the financial domain, we will promote various platform businesses such as AI screening, security, NEOBANK, and Kantan (Easy) Mortgage, and in the non- financial domain, we will develop new businesses such as digital transformations in primary industries, carbon credit, and financial data platform. This will enable us to achieve a ROE of 20% in the early stages and help accelerate our efforts to increase corporate value and profit growth over the medium to long term.

On March 29, 2023, we became the first online-only bank in Japan listed on the TSE Standard Market, and fiscal 2023, immediately following the listing, was an exceptionally important year for our company. Despite the impact on the financial markets of the collapse of overseas financial institutions, the Bank of Japan’s decision to end its negative interest rate policy, and the sharp depreciation of the yen, thanks to the support of our stakeholders we were able to make solid progress on increasing profits.

We are also working strategically on our various business projects in the final year of our medium-term business goals, fiscal 2024.
In the digital banking business, we aim to steadily increase deposit volume and the number of customers, while, at the same time, maintaining and further expanding our dominant position as the leader in new mortgages. In addition, we raised the short-term prime rate in May 2024 in conjunction with policy rate hikes; therefore, we will pursue strategies based on precise and swift management decisions to maintain strong growth in “a world with interest rates”.

In particular, our strength in mortgages, in which we currently boast the largest annual amount of mortgages originated among Japanese banks, has enabled us to increase the number of mortgages originated by improving quantity and quality through a combination of high technology and high-touch service by providing a complete AI screening and business-to-business-to-consumer platform and a unique franchise agency model (actual mortgage outlets in a franchise format). Our goal is to further accelerate our growth and increase our market share to 20% in the future.

We will also aim to increase the number of companies using NEOBANK, our BaaS business that provides partner companies with our excellent banking features to support their core business. At present, we are the pioneer in BaaS and already have the top^*3 share in full banking BaaS, but in order to further strengthen our position, we will continue to promote our multi- platform strategy across all industries, and in the medium term, we hope to achieve alliances with 100 companies.

And the THEMIX business is a new business area that we are working to develop into another major pillar. We are already collaborating with numerous companies and municipalities on projects such as digital transformations for primary industries to create carbon credits to help reach a decarbonized society, and financial data platforms to achieve more optimal advertising distribution, and we are making a good start.

By sustaining and accelerating the pace of growth in all businesses, we believe that we will be able to achieve our ROE target of 20% in the not-too-distant future.

With the aim of creating innovative business models for a new era, we will achieve many innovations by actively leveraging cutting-edge technologies, such as AI, in our business, and we will build business models that can rapidly adapt to the changing environment.

To continuously improve economic and social value, we have identified materialities as the key issues that should be given priority, and we are strengthening our efforts towards sustainable growth and contributing to society. We will strive to ensure diversity through DE&I (diversity, equity and inclusion), strengthen human capital through the development and acquisition of human resources with the skills to support innovation, and strengthen management foundations and governance through the advancement of GRC (governance, risk management and compliance). We will also promote innovation by launching companies that solve social issues and supporting businesses through active investment in socially valuable projects (social investment).

Additionally, we are actively pursuing initiatives to combat climate change in order to protect the global environment. By leveraging cutting-edge technology, we have taken the first step toward realizing a decarbonized society, with the goal of achieving zero carbon emissions.

For example, our subsidiary THEMIX Green, Inc., which was established in October 2023, is working to create a carbon credit market and transfer prosperity to primary industries. This will improve the profitability of primary industries, allowing them to reinvest, and will enable the appropriate management of agricultural land and forests, increasing the amount of CO2 absorbed. A virtuous cycle will then be created, with secondary and tertiary industry companies purchasing the resulting carbon credits to offset their own emissions. It is our intention to actively contribute to sustainability, beyond this particular example.

We are committed to a “customer-centric approach”. We believe that continuing to achieve the highest level of customer satisfaction is one of the most important benchmarks in our business.

Customers are always looking for something better, and new technologies are emerging all the time. In order to ensure that customers continue to choose us, we need to be able to react quickly to change.

In order to continue providing services that surpass the needs and expectations of our customers, we are always receptive to user feedback, and our employees are working tirelessly to improve the customer experience through UI/UX improvements, to provide both convenience and safety through cutting-edge technology, and to provide higher added value by refining our products and services.

We will also sufficiently fund and rigorously address measures against the growing risk of cyber-attacks and fraud. We are proud to say that we have taken measures and invested a considerable amount of money in this area ahead of other banks. We will focus on introducing advanced biometric authentication systems that utilize international standard FIDO authentication^*4, as well as deploying online anti-spoofing technology, and establishing a 24/7 monitoring system to deter fraudulent trading and misuse of accounts when they are opened and thereafter.

Additionally, we are actively pursuing initiatives to combat climate change in order to protect the global environment. By leveraging cutting-edge technology, we have taken the first step toward realizing a decarbonized society, with the goal of achieving zero carbon emissions.

In fiscal 2023, we were able to recruit even more talented people than usual thanks to our listing. In addition, we moved to new offices in May 2024, which feature a tech company-like interior and feel. We are very pleased that we have been able to successfully recruit highly motivated new graduates and mid-career employees through this strong presentation of our tech company image.

I have always believed that the most important thing in nurturing the growth of employees is to provide opportunities for them to take on challenges. That is why I always leave the door to my office open, and I tell my employees that they can come to me at any time to discuss things or pitch business ideas.

We have also adopted a value evaluation system in our personnel system, so that people who take on challenges and fail are evaluated more highly than those who succeed without taking on challenges. We are also aiming to create a workplace environment that is comfortable to work in, and that promotes business growth from the perspective of diversity, through initiatives such as the hiring of overseas engineers and the appointment of our first female executive officer.

Additionally, we are actively pursuing initiatives to combat climate change in order to protect the global environment. By leveraging cutting-edge technology, we have taken the first step toward realizing a decarbonized society, with the goal of achieving zero carbon emissions.

The message we send to our stakeholders, including our shareholders and employees, is that we are here to bring about change for the betterment of society. We have evolved three times, from an Internet Bank to a Digital Bank, NEOBANK, and THEMIX. We believe that by ensuring steady growth in the financial domain and creating new businesses and transforming industries in the non-financial domain, we will be able to achieve our ideal of a fair society where affluence circulates.

Even in terms of share price, I believe that our market valuation has increased over time, and we have finally arrived at the starting line. Our listing has been hugely beneficial for us by allowing us to hear directly from our shareholders at general meetings and other meetings, and by allowing us to recruit many talented people. Communication with our shareholders is important to us, and we are able to use your feedback directly to improve our management.

I view management as a process of working things out in reverse. We have to think strategically about what needs to be done to grow beyond the bounds of being a bank and into a tech company.

Guided by our corporate slogan of “with technology, in the spirit of integrity, we will create a society where affluence circulates,” and with a customer-centric approach at the heart of our business, we will strive to further improve convenience, offer attractive products, and achieve sound management and organizational operations, as well as strong profit growth, in order to continue to be the bank of choice for our stakeholders.