Japanese banking group is planning to grow its financial technology business through new acquisitions. Meantime, regulatory authorities in Abu Dhabi are working on establishing fintech ecosystem in the UAE.

Mizuho Financial Group, the biggest banking group in Japan, projects to acquire fintech startups to gain a competitive edge in the industry. According to the group’s President Yasuhiro Sato, Mizuho needs to develop a new fintech business in the near future to be able to compete with the leading US-based and European companies.

The organization is targeting the US fintech companies operating in the fields of big data processing and artificial intelligence. Mizuho will reportedly allocate as much as $100 million for new acquisitions and will likely enlarge the funds later this year.

Sato acknowledges the fact that Mizuho needs to buy US and Asian banks in order to continue expanding in the future. However, he recognizes that the need for such acquisitions is not as strong as it was before, taking into account a turndown in developing economies.

As Reuters reports, Mizuho is also going to reduce loans with low returns, including bonds and low-rate mortgages. Sato said that Mizuho’s assets ($1.8 trillion), which the group has grown by almost a third over the last decade, are expected to decrease in the next three years.

In view of the world economic situation, the group will focus on acquisitions that cost around 100-200 billions. “An acquisition of a U.S. bank, for instance, would cost at least 1 trillion yen ($9.1 billion). Under the current uncertain environment, an investment of such scale has been moved back,” he told Reuters.

Until now, Japan has been quiet in terms of fintech innovations, but the situation is likely to change in the upcoming years.

Currently, the rise of fintech is being observed in the Middle East as well. The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) and startup accelerator Flat6Labs have teamed up to promote fintech development in the region.

The deal offers a framework for FSRA and Flat6Labs to combine their knowledge and expertise to launch initiatives that will support the growth of fintech environment and innovations in the financial services industry.

“As an Abu-Dhabi based establishment, Flat6Labs is well recognised as a successful, committed and experienced technology accelerator in the region,” said FSRA’s CEO, Richard Teng. “More importantly, Flat6Labs shares our desire in fostering a vibrant entrepreneurial environment to support the growth of FinTech in the region. We look forward to launching new initiatives with Flat6Labs in the near future.”

Given the ongoing industrial development, banks and other financial institutions need to be open to new technologies. According to Barclay’s former chairman, Sir David Walker, financial providers have to embrace fintech to be able to compete with financial startups, The Telegraph wrote.

The banks have to retain customers’ confidence and rebuild their reputation, which was negatively affected by the financial crisis and a series of scandals.

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