What issues are currently top of mind with our large corporate clients?
Treasury Services in Japan is engaged with a broad range of large corporate clients, across many industry segments. Many of our clients are multinational corporations, with headquarters in Japan, while others are headquartered elsewhere. No matter where our clients are located, there are very clear recurring themes. Most often, our clients are talking about:
More recently, as a direct result of the March 11, 2011, earthquake and tsunami events in Japan, there is a more intense focus on business continuity. Immediately following the earthquake, all J.P. Morgan systems remained operational. We were able to take all necessary steps to ensure the safety of our employees and were able to maintain our ability to serve our clients. In addition, we were able to assist some clients with critical payment processes, normally handled by other providers, which had been interrupted by the earthquake.
Do clients that are headquartered in Japan express different needs than clients headquartered elsewhere?
Definitely. Our large corporate clients in Japan have long operated globally, but, in recent years, their footprint has become much more complex. For example, the Asia network of these clients is expanding rapidly, and there are now direct links between their operations in different countries. This means that their legal entity structures, regulatory requirements, trade flows and payment flows have become more complicated.
Many Japanese corporates are increasingly interested in looking at centralizing treasury operations and setting up shared service centers. Our firm can work with clients to set up their centralized treasury hubs. The firm’s global technology platform — combined with our understanding of local requirements — offers clients the consistency and flexibility needed to realize operating efficiencies — a major goal as they set up shared service centers. This uniformity allows sophisticated multinationals with global technology platforms to link to a banking partner in a consistent manner around the world.
Clients doing business in Japan face different challenges. Many have operated in Japan for a long time, and the country is often their largest market in Asia. In the past, Japan operations were often managed almost independently, but we are now seeing a strong trend toward integrating regional and global treasury functions. This leads to discussions around connectivity and comparisons of treasury management practices in Japan, the region and the headquarters country.
What advice would you give to a Japan-based company about doing business globally?
I’d suggest that they take advantage of SWIFT’s Standardized Corporate Environment (SCORE), which is a closed user group that allows corporates to interact with financial institutions and set up a global overlay structure for their liquidity management. SCORE is also helping to accelerate the trend toward Shared Service Centers or Payment Factories by standardizing payment formats globally. Our firm can help corporations adapt SCORE.
What advice would you give to international companies looking to do business in Japan?
Corporations can benefit from having a single window for all types of payments in Japan — and J.P. Morgan can help with this. This is much easier to do now than it was a few years ago when tax payments and utility company payments had to be made through local banks. The increased adoption of electronic payments and direct debit by tax agencies and utility companies in Japan
has made it much easier for multinational corporations doing business there to consolidate their banking relationships with one global bank.
How would you describe J.P. Morgan’s commitment to the market?
J.P. Morgan has a long standing history in Japan that dates back more than 80 years. Today, Japan continues to be a critical market for us. We’ve been a direct member of the Zengin Clearing System for many years, and the operator of the Tokyo Dollar Clearing system for 25 years. Today, we are one of the largest foreign financial institutions in the country.
What makes J.P. Morgan Treasury Services’ a strong competitor in Japan?
We truly have a global footprint, supported by local expertise. In total, we have about 1,400 people in Japan, as well as many people who know the Japanese market located in Europe, the U.S. and other key hubs in Asia.
Another key differentiator is the quality of our people. Our strong implementation and client service teams on the ground here are the cornerstone of many of our long-term relationships with clients.
Our products also set us apart. Our broad range of domestic cash management and JPY clearing capabilities — all of which we keep refining — helps ensure that we meet the evolving needs of our clients. The global consistency and connectivity of our products ensures that we offer our clients solutions that have the same look and feel wherever they are located.
What will be the major area of focus for Treasury Services in Japan over the next 12 months?
We estimate that, by the end of 2012, J.P. Morgan Treasury Services will have the largest volume of domestic payments of all foreign banks in Japan, so we are focused on ensuring that we will continue to execute flawlessly against these increasing payment volumes. We are also concentrating on having the broadest range of domestic cash management solutions available in the market.