April 3, 2017 -
Sumitomo Mitsui Financial Group will develop multi-factor biometric identification solution to enable customers to make secure online payments for the company’s new fintech venture, according to a report by Nikkei Asian Review.
The move comes a few months after Sumitomo Mitsui Financial Group Inc. (SMFG) first announced it was partnering with a major Japanese IT firm and an Irish company to form a new biometric authentication services company.
The bank will own a majority stake in the new 20-person fintech venture, which will also include investments from NTT Data and Daon. The fintech company is set to launch later this spring and start operating as early as July.
Once the multi-factor biometric identification platform is fully developed, the fintech company will pitch it to online retail and travel booking sites, electricity and gas companies, insurers and others.
Users will be able to authenticate payments with biometric identifiers like fingerprints, voice and facial features that they will register with a smartphone app.
The platform could provide e-commerce operators a more affordable solution to develop their own biometric authentication systems.
Sumitomo Mitsui will receive usage fees from these businesses, as well as gain access to a wider customer base to sell its other financial services.
Previously, Japanese banks and bank holding companies were only allowed to take stakes of up to 5 percent and 15 percent, respectively, in non-financial businesses.
However, a new revision to banking law now allows banks approved by Japanese watchdog Financial Services Agency to invest more in fintech businesses.
If the new fintech business is approved, Sumitomo Mitsui will become the first bank to take advantage of the new law.