Japan’s Rakuten Group plans to consolidate its fintech and banking businesses
Japanese e-commerce giant Rakuten is planning to reorganise its fintech operations by integrating all its fintech businesses, including Rakuten Bank, into one unified entity in an attempt to gain a “competitive advantage” and optimise its “allocation of resources”.
Rakuten announces plans to consolidate all its fintech units
The move will see Rakuten Card, Rakuten Securities Holdings, Rakuten Insurance Holdings, and other Rakuten-owned fintech businesses join with Rakuten Bank to form one unified group.
Rakuten Group says that the reorganisation aims to “leverage group synergies to maximise the lifetime value of each member and minimise customer acquisition costs, thereby maximising group profit”.
In addition, the firm says that consolidating its fintech units will enable more flexible decision-making and increased collaboration across its ecosystem, specifically in the areas of AI and data integration.
Rakuten’s executive board have executed a Memorandum of Understanding (MOU) to discuss the process. Also, as a measure to avoid conflicts of interest between Rakuten Group and Rakuten Bank, the bank’s board of directors has established a special committee to ensure fairness in the reorganisation.
Tokyo-headquartered Rakuten has additionally stated that Rakuten Bank will continue to be listed on the Tokyo stock exchange after the integration, while Rakuten Securities Holdings may have to halt its plans for an initial public offering (IPO) if the restructuring plans are successful.
The planned company reorganisation, which is intended to take effect in October of this year, will also require the necessary approvals and licences from regulatory authorities.
Rakuten underscores its prerogative to opt out of implementing all or certain aspects of the proposed changes, while also indicating it has not ruled out additional restructuring.
The announcement of Rakuten’s intention to consolidate its fintech operations into a unified entity aligns with a similar strategy unveiled recently by UK-based fintech ieDigital. ieDigital is uniting with its two recent acquisitions, Abaka and Connect FSS, under a singular identity.
