Friday Feature Review 21 Annual Japan International Banking & Securities System Forum 2020 金曜日のTMJレビュー: 第21回日本国際金融システムフォーラム2020

This week's 21st Annual Japan International Banking & Securities System Forum 2020 on February 27 in the Royal Park Hotel, was very ambitious in scale and breadth. Please review our Executive Summary wrap up notes of 18 highlight points below. See what you missed from a wide number of Fintech, Crypto and Blockchain speakers on the latest market innovation trends.

* Yasushi Nakayama, Director at the Center for Advanced Financial Technology, at the Bank of Japan had curious comments and figures to share on cloud usage.
* Just 8.4% of Japanese banks are using cloud based services today. Therefore 89.6% of banks in Japan are NOT using the cloud! The figures are better for Securities, Insurance and Credit Card firms that have a 44% use of cloud based services. Still 56% do NOT have any cloud service exposure.
* FEDI (Financial Electronic Data Interchange) is still early stages in Japan. Open API trends now common with Fintech & IT firms are not shared with Japanese manufacturers. This is a major hurdle with any IT evolution within Japan.

* Joji Saga, IT Development Manager, at the Tokyo Stock Exchange, JPX Group had very good insights. Japan has not grown digital labor like "Robo Advisors" aka RPA (Robotic Process Automation) quickly within Fintech. 
* The main reason for this is the unknown level of governance issues from various kinds of users. Nobody wants to be the first, and make a mistake. JPX now has 1221 corporate members across all exchanges as of today.
* Japan's leading private watchdog for Bitcoin is the JCBA (Japan Cryptocurrency Business Association). It currently has 129 corporate members in Japan. This figure includes all FSA certified crypto exchanges in Japan. 
* Governance issues are understandable given the 4 major hot wallet hacks in Japan. All started with Mount Gox, followed by Coincheck, Zaif and Bitpoint.

* Yuzo Kano, co-founder of bitFlyer, shared views on crypto market trends. CBDC (Central Bank Digital Coins) are the new expected hybrid from Fiat currency governments into the crypto space. 
* Tomoo Onishi, CEO FXcoin had interesting comments on the age or various Japanese traders. Cryptocurrency is mainly traded by Japanese now in their 20s (29%) 30s (34%), while FX is dominated by those in their 40s (36%) and 50s (25%) however, securities are now mostly held by those in their 60s (69%).
* Crypto currency is known for volatility in market trading. Futures & Options have limited this volatility over the last 14 months. Stable coins are also growing in popularity in the future.
* Sweden is launching a CBDC or Digital Krona in Q1, this year. China expects to launch it own CBDC or Digital Yuan in Q2 of 2020. Japan hopes to catch up with a Digital Yen by Q3 or Q4. A Digital Euro is expected around the same time frame. No clear US plans for any Digital Dollar are expected soon.
* Data today is the most valuable resource in 2020. Top global hedge funds like Citadel & BlackRock or Japanese banks like Mizuho & MUFG use an edge. It is a streamed financial service called Panopticon by Altair, that create Digital Visualization Tools.
* Akihiro Shimoda, Deputy Director, Strategy Development at Japan's FSA had a very open view to helping Fintech startups and innovation. There will be a free FSA Fintech Seminar in Tokyo on April 21, 2pm-5pm contact FSA Support desk at Tel +81 03 3506 9510 or fintech@fsa.go.jp to attend.

* Dr. Jochen Durr, Neil Thomas and Toshiaki Sunagawa all from SIX Financial information, had worthwhile insights to share as well. The exchange group from Switzerland are all about securing wealth and trade security. Over 2 Billion illegal access attacks are attempted ever day!
* We now live in a world of VUCA (Volatility, Uncertainty, Complexity, Ambiguity). SIX have been in Japan for 30 years, the SDX or Swiss Digital Exchange, they are now rolling out is just the latest product offering of this well established institutional service.
* STO (Securities Token Offering) products have a high potential in cost savings, but regulations differ between nations. Most securities exchanges are now national in nature and sit within a clear border. SIX do not consider any STO as new in nature. More just a traditional product with new features. A curious distinction. 
* Most European Securities Laws will adapt existing laws to absorb STO products in future. The US & Japan are creating specific new laws. Decentralized Financial markets or DeFi may force further change faster of this in future.
* Currently, Japan requires securities companies to have a Type 1 & 2 license for STO products. The full cost savings using any STO to raise capital may or may not be lower in cost short term. So Kawakami, Strategy Group, Fintertech commented on costs. More executed deals will need to be done before any clear STO costs structure and comparison can be done.

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, conferences and anything else with a financial theme. Follow us now for our free weekly updates, just click here. Thank you for reading and learning more about how money is made in finance! 

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Linkedin Instagram or Twitter. We are the world's #1 recruiter on Twitter, with over 50,000+ followers globally! click here! 

あなたがアジアや日本のセールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてください。ティエムジェィパートナーズをLinkedin Instagram またはTwitterでフォローしてください！ 世界中のTwitterで第1位のリクルーター、50,000以上のフォロワーを既に持っています！クリックしてください。

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.
Tokyo                                          Tokyo

      Mark  Pink                               Shinichi Nagasawa
Direct + 81 3 3505 3891              Direct + 81 3 3505 3891

Friday Feature Book Review: The Master Algorithm (AI Machine Learning) : Pedro Domingos マスターアルゴリズム (AI ディープラーニング)：ペドロ・ドミンゴス

We know that computers are powerful, but we may not know the full power of deep learning or artificial intelligence. It is not just coming in the future, it is here now, and advancing daily. Pedro Domingos explains the 5 main tribes that make up machine learning today. I only thought he would stick to IT, but I was wrong. It is not a dry subject as it is already active in our wider business world today. We use many of these AI algos daily without knowing them by name.

Take your email spam filter. It may seem basic today, but it is based on machine learning. One if these AI tribes believes in knowledge composition. They assume all email is spam. They use rules to confirm this. Is Viagra in the title? then probably spam. is FREE in the title? then probably spam. Is a close friend's name in the message? then maybe not. It is all about probabilities. They make email worthwhile due to these helpful probability filters. Your email spam filter is using AI right now. It is already helping you to focus on what is important for you. It is here and operating in your business right now.

AI is all around us and programmers are trying to figure it out. Your human brain functions a certain way. Why not figure out how exactly? Why not reverse engineer it as a process? Why stop there? Humans have brains, but all animals have evolved, and the planet earth evolved, so why not try to better understand all of evolution? Would that not be a better bigger picture to figure out? This is just one of the many concepts that AI specialists struggle with when the choose what exactly, to focus on.

The Top 5 Takeaways from this book that impact any reader are based on the 5 main tribes within AI. These are just general overviews. Much deeper details are covered in the book. It is explained very well.

1) Symbolists: Try to focus on the problem of knowledge composition. They figure it out with inverse deduction. If 2+3=5, then what is 5-2=? by deducing similar data, you can figure out 3 as an answer. They focus on gaps in knowledge and is the most scientific in approach. The surprise is when algo figures out problems without a human. A robot called Eve discovered a new malaria drug by itself, without human guidance.

2) Connectionists: Try to focus on the problem of credit assignment. They figure it out with backpropagation. They focus on a more human, less logical world. Neural networks with newly discovered knowledge. When your brain learns, a synapes takes place between neurons. A large 1 billion network of inputs from cat videos on YouTube was the first algo used to recognize the cat content from the network.

3) Evolutionaries: Try to focus on the problem of structure discovery. They figure it out with genetic programming. They focus on genetic coding or genome. The best algos replicate to create child algos made from half male half female algos. New electronic discoveries have been made that could not have been made by humans alone. In fact some of these patents would never have been created by a human.

4) Bayesians: Try to focus on the problem of uncertainty. They figure it out with probability inference. They figure it out with comparisons. If type A people DO like X, and type A people do NOT like Y, then if one type A person DOES like X, another type A may NOT like Y as well, if the likelihood of these comparisons work well. Repeat with millions of cases and you can find this pattern out clearly. Spam filters come from this.

5) Analogizers: Try to focus on the problem of similarity. They figure it out with kernel machines (support vector machines). They figure it out with similar examples. Recommendations systems in e-commerce, where if you buy something, you are also asked to buy other things people with similar tastes also buy.

There are many amazing stories about how AI is changing our lives. Besides spam filters, another widely used concept is the recommendation engine. It may be the most financially successful use of algo yet. When Amazon suggests you buy another book, based on what other similar readers buy, you are using that algo. this is responsible for 33% of Amazon's revenue! Considering the total, that is a big umber. Netflix also uses one and it accounts for 75% of gross revenues. Again, this is a very large number and actively used by millions of customers. There are many ways to understand our brain and the world around us. AI is just the starting point that helps us figure out how exactly, that process can be better understood. Highly Recommended!

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, conferences and anything else with a financial theme. Follow us now for our free weekly updates, just click here. Thank you for reading and learning more about how money is made in finance! 

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Linkedin Instagram or Twitter. We are the world's #1 recruiter on Twitter, with over 50,000+ followers globally! click here! 

あなたがアジアや日本のセールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてください。ティエムジェィパートナーズをLinkedin Instagram またはTwitterでフォローしてください！ 世界中のTwitterで第1位のリクルーター、50,000以上のフォロワーを既に持っています！クリックしてください。

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.
Tokyo                                          Tokyo

      Mark  Pink                               Shinichi Nagasawa
Direct + 81 3 3505 3891              Direct + 81 3 3505 3891

Friday Feature Book Review: Falling Short (in retirement) by Charles D. Ellis チャールズD.エリス: 老後資金がショートする (退職危機)

More than 30 years ago, a major change to the US retirement system began. At that time, 401(k) programs began. This has changed how many US citizens view retirement, but the recent reasons for retirement are now impacting this change. How did this all begin, and how can we find our way out of this unclear future?

This book clearly explains how the future of US citizens will need to adjust to only "possible" future retirement plans. Many similar economies in Europe, Africa, Brazil, Japan, Canada and China are all looking at similar economic trends with pension allocations. Assumptions need to change soon, and action needs to be taken today, in order to provide for tomorrow.

Today, the average US citizen retires at age 64 for men, and age 62 for women. However, the average retired citizen will continue to live on for around 21 years for men, and 23 years for women, so age 85. The average citizen will live for a much longer period than any pension planning is now expecting. Any cash flow is a hard reality, and now need a rethink. Any change will not be popular with the current population.

If the average US citizen has only US$111,000 saved within retirement savings. That is just $400 a month spread over 23 years, and that number does not bode well for the future. Inflation and medical care will make that figure seem lacking. The biggest change the author tries to suggest is raising the new retirement age from 65 to 70. A nice first step, but it is hardly a final guide for long term senior living prosperity. Working at least part-time after age 60, may be a financial reality for many future retirees going forward.

How did pensions get it so wrong for so many? Almost 200+ years ago, the world's first pensions began in Europe, and were started by Napoleon Bonaparte. He started a military veterans pension for his soldiers. At that time, the average French citizen lived until age 55, so by starting any pension age at age 65, it built a 10 year cushion, and was very sustainable. Soon other parts of the government offered similar pensions to other citizens. The military & veteran origins of these government pensions were soon forgotten.

Later, the private sector followed suit and the whole concept of a military or veteran connection was lost completely. The quality of life was able to rise in France, and the rest of Europe, but the retirement age was never touched. This inability to adjust the retirement age has created a difficult to sustain system today.

The Top 3 Takeaways from this book that impact any reader are:

1) The first pension in Europe, was offered at start at age 65, when the average lifetime was only 55 years of age. This built a 10 year cushion, or margin of safety for the system overall.
2) The very first pension was in fact a military veteran disability pension, and the went into wider adoption.
3) New changes will have to reflect the life cycle of a longer life until age 85. A delayed start or partial start may need to be put in place.

This is a focused book, that really tries to bring ideas to a system in need of change. If thinking about bigger picture solutions turns you on, then this is a very inspiring starting point for a worldwide challenge for all citizens. Given where worker skills need to change with a future full of AI and many other possible changes to retirement lifestyles. It provides some solutions but is only a starting point. Many more ideas need to be reviewed and considered for the pension aged members of many societies. It is an economic puzzle that needs to be fixed. The sooner the better for us all. Highly Recommended!

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, conferences and anything else with a financial theme. Follow us now for our free weekly updates, just click here. Thank you for reading and learning more about how money is made in finance! 

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Linkedin Instagram or Twitter. We are the world's #1 recruiter on Twitter, with over 50,000+ followers globally! click here! 

あなたがアジアや日本のセールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてください。ティエムジェィパートナーズをLinkedin Instagram またはTwitterでフォローしてください！ 世界中のTwitterで第1位のリクルーター、50,000以上のフォロワーを既に持っています！クリックしてください。

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.
Tokyo                                          Tokyo

      Mark  Pink                               Shinichi Nagasawa
Direct + 81 3 3505 3891              Direct + 81 3 3505 3891

Friday Feature Book Review: "The Ascent of Money" by Niall Ferguson マネーの進化史 : ニーアル ファーガソン

I love history and finance, and this was both. It was pure pleasure from page one. Niall Ferguson explains both very creatively and amusingly, a very complex journey of how money started out. You learn how it evolved as a means of exchange at first, to the current storage of wealth. We then learn more about its globalized spread as a critical need for use across borders. 

This book and in-depth research has been so popular it also became a BBC documentary series with wonderfully engaging episodes. There were a number of stories in financial history that I had never before encountered, and I liked that historic challenge. Was Forex market making really how the great families in Italy like the Medicis, made their fortunes for example? Our modern day view of banking does seem to have its origins from this point. 

The original word for bank, comes from banco or bench, where the original money changers worked from in Florence. If they went insolvent, they broke their bench, hence the term bankruptcy in English used today. There were so many similar amazing facts about how the world of money started, evolved and later developed. It was a treasure trove of fascinating historical facts like this.

Barter is how we all began, but both coins and currency, have had an amazing change in development over time. This is what the author Niall Ferguson, really helps you to better understand. Bitcoins are just the latest chapter. It is but one of a long list of new products and concepts that sometimes work, sometimes not, but always moves forward. You have to make mistakes in order to learn, and the world's economies are no different. There have been plenty of global mistakes to learn from.

No matter how much you think you know about, there is always something more to add to your knowledge and consider. The world of money is the history of the world's economy, and it is a story that is ultimately never ending. At 400+ pages this book is long and really enjoyable, in a full bodied multi-course dinner kind of way. 

The Top 3 Takeaways from this book that impact any reader are:

1) Rome was the first large system on earth to use a common widely used money. Gold, silver and copper coins originated large distribution across borders from there.
2) Abuse of metal coins came soon after as late stage empire economics had a negative impact across the Roman world.
3) Paper currency may have originated in China, but finding common means of exchange has always been a challenge globally. This is true for many markets, even today with virtual currencies like Bitcoin.

History used to be boring and bland in the hands of many, but this author Niall Ferguson, is different. The author's style is so entertaining that I feared its ending as I ran out of pages left in the book. This is always a very good sign. This book is really focused on the twin subjects of finance & history, if these interest you, then this book is Highly Recommended!

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, conferences and anything else with a financial theme. Follow us now for our free weekly updates, just click here. Thank you for reading and learning more about how money is made in finance! 

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Linkedin Instagram or Twitter. We are the world's #1 recruiter on Twitter, with over 50,000+ followers globally! click here! 

あなたがアジアや日本のセールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてください。ティエムジェィパートナーズをLinkedin Instagram またはTwitterでフォローしてください！ 世界中のTwitterで第1位のリクルーター、50,000以上のフォロワーを既に持っています！クリックしてください。

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.
Tokyo                                          Tokyo

      Mark  Pink                               Shinichi Nagasawa
Direct + 81 3 3505 3891              Direct + 81 3 3505 3891