Mizuho has announced plans to establish a private banking company in Japan. The 70-person unit, Mizuho Private Wealth Management Company, will provide consulting services and various personalised financial products for clients with 500 million yen or more in assets. It will be a tough market to crack, however. A private banking market in Japan has never fully taken off despite attempts by both foreign and domestic players. Wealthy Japanese have tended to keep their money on deposit, while the banks have not focused on customer service. Even at a retail banking level, only now is there evidence of a service-oriented banking culture, led by Shinsei and Tokyo Star.
For Japan's wealthy seeking advice, the solution has been to put money offshore. One consultant explains that a common method was for travel agencies to organise private banking tours, where Japanese high-net-worth individuals were taken to several banking capitals such as Geneva, Zurich and Luxembourg to meet with banks.
With changes in regulation by the Japanese government, a private banking environment onshore looks set to develop – albeit at a slow pace. "Although wealth management services in Japan are still in their infancy, the market has phenomenal potential.