TOKYO — Sumitomo Mitsui Financial Group and SBI Holdings are set to enter into a comprehensive partnership, Nikkei has learned, in a move aimed at taking a lead in financial technology.
Through the deal, Sumitomo Mitsui, the nation’s second largest bank, will acquire a stake in the mobile only brokerage unit of SBI, the nation’s top online broker. SMFG will also put money into a 100 billion-yen ($930 million) fund SBI will set up to invest in financial technology companies.
The deal will combine the nationwide branch network of SMFG with SBI’s dominant presence in online trading. It is expected to help the partners create products and services that will better cater to millennials.
The partners are expected to sign the deal this week.
The financial groups are also considering mutual capital ownership as a way to deepen their ties.
The tie-up comes as digital technologies tempt companies outside the finance industry into the sector, further intensifying competition.
Chat app operator Line, for instance, offers financial settlement, investment and insurance services through its app, while online retailer Rakuten provides a full range of financial services through its banking and brokerage units.
The deal will complement each partner’s weaknesses. SMFG is trying to beef up its digital offerings, while SBI is seeking to add face-to-face consultations to its digital services.