A team leader who is evolving global retail services with ICT
"I want to use FinTech to bring more freedom and more convenience to global retail services"
Information and communications technologies (ICT) are driving the evolution of retail services and generating new electronic payment methods such as electronic money and mobile wallets. Based on NEC's rich experience, including a long partnership with one of Japan's largest convenience store chains, the company is developing a wide range of retail IT solutions that are being promoted globally, with a special focus on Asia and emerging countries. Yuichi Koike heads the product team and talks to us about a range of topics, including different implementation examples from overseas, the strength of NEC's experience, the outlook for retail IT solutions in the future.
NEC is one the first companies to focus on the much-talked-about FinTech
--First could you tell us something about the currently trending FinTech and how it is being used in retailing?
Koike: FinTech (Finance x Technology) refers to a wide range of services that leverage IT in the field of finance. Within the retail sector, FinTech is linked with electronic payment services, and it has been in the spotlight since around 2013. The electronic money systems used by convenience stores since around 2007 are another example of FinTech.
About ten years ago, NEC started providing electronic money payment solutions to customers developing a chain of retail stores. NEC has been involved in electronic payment services since before the term FinTech became well known, and we have a great deal of experience with retail sector customers.
It is said that retail services have developed with the evolution of payment methods. I am sure that in the future, FinTech will play a major role in helping retail services become more advanced.
--Tell us about NEC's initiatives in the retail sector.
Koike: NEC has been providing domestic customers with retail ICT solutions to comprehensively support store systems, including POS systems, PCs, servers, business terminals, software, and systems to integrate stores. Based on that experience, we have expanded our business to provide solutions and systems involving the processing systems of credit cards and electronic money.
Currently, we are not limiting out business to domestic retailers, and are now developing a wide range of solutions for customers around the world.
NEC is currently focusing its efforts on the payments sector of FinTech for retail businesses. Specifically, we are reinforcing and expanding our solutions for customers in three subsectors: electronic payment solutions for retailers that provide comprehensive "one-stop" systems; advanced solutions for retail services that leverage FinTech to innovate consumer buying styles; and FinTech solutions for innovative services, including face recognition payment systems and services related social contribution activities. We also believe that in the future there will be needs in the retail sector for virtual currencies and remittance services.
--What work are you currently involved in?
Koike: I have been involved in FinTech related work for a long time. From April this year, I was put totally in charge of the planning, development, and delivery of products for retail IT solutions for all of our retail sector customers in Japan and abroad.
The role of the Value Creation Department, of which I am in charge, is to create a wide variety of products for our retail sector customers both in Japan and overseas. My main work as the department manager is to develop and organize global retail projects, and develop new products. As the leader of the team, I am also in charge of developing HR talent.
Developing products for individual customers is important, but I also like to emphasize to my team the importance of developing products based on the One-to-Many concept.
Developing markets in a wide range of countries, including Taiwan, Indonesia and India
--Can you give us a specific example of a global project that you were involved in?
Koike: I have been involved in quite a few overseas projects that were related to payment solutions for retail companies. For example, we provided a major convenience store chain in Taiwan with an electronic money system that used contactless IC cards.
At the time there were several types of electronic money in use in Taiwan, which meant that there were several types of reader/writers on every cash register counter. NEC supplied a reader/writer that could integrate all the different types, so that only one unit was needed to receive payments from all the different card types. Today, about 5,000 stores use the NEC electronic money system.
At the Aeon Mall in Indonesia, we built an electronic money system that can be used by shops in the food court. We provided all components for the electronic payment system used in this project, from the cards to the reader/writers, and the payment server. Thanks to speedy payments made possible by not having to handle cash, there was an immense improvement in customer satisfaction, and a reduction in lost sales opportunities.
NEC plans to expand the utilization of this electronic money system to help Aeon Mall Indonesia expand its outlets.
NEC provided India's first commercial service that allowed customers to buy movie tickets and drinks using a smartphone-based mobile wallet system. The system was supplied to the PVR Cinema chain of cinema complexes. We have heard that the top management of PVR Cinema was deeply impressed by NEC's advanced technology and the fact that we continued to work through the Christmas and the New Year's holiday.
Also in India, we provided an electronic money system to the ICICI Bank, and provided support to help expand the use of electronic money. These examples of developing electronic money systems abroad were made possible because of the rich experience and expertise we gained from our experience in Japan.
Cutting-edge FinTech is also helping the economically disadvantaged
--Do you have any examples of solutions that are not for retail companies?
Koike: There was a project in Mozambique that involved a solution for innovative services.
In emerging countries such as Mozambique, many of the farmers are involved in low productivity subsistence farming and are suffering from chronic poverty.
They cannot earn cash, so they cannot invest, and they just continue low productivity farming. Because they do not have any credit, they cannot borrow money to purchase chemicals, fertilizers, or machinery. In addition, because of unplanned consumption they have no surplus funds.
NEC supported Nippon Biodiesel Fuel (NBF), which had been active in Mozambique, to implement a pilot service using an electronic money system launched in fiscal 2013 by the Japan International Cooperation Agency (JICA) and the Food and Agriculture Organization (FAO).
NEC provided the entire system, including IC cards, tablets, store-front terminal applications, reader/writers, and mobile printers, and also provided support to construct a single information/financing cloud platform that includes electronic money and credit information services. Thanks to this project, individual farmers now have access to services related to savings, payment, remittance, usage history viewing, and special-purpose savings. Companies have access to credit information, loan management, and inter-account remittance services.
Up until now various types of support have been provided, such as agricultural technology instruction, supply of farming materials, and buying of crops. It is believed that by providing information and guidance on efficient fund management methods through the new financing/information platform, problems that could not be solved through conventional means can now be solved.
If productivity improves and farmers can make a profit, then they can invest in education and medicine, which will raise the quality of life of the people of Mozambique. This project in Mozambique is a new way of utilizing FinTech that allows the economically disadvantaged in emerging countries to use an electronic money system. We also feel that it has an important role as a way of contributing to society on an international scale.