Mizuho Financial and messaging app Line announced the temporary abandonment of plans to create a mobile bank.

Source: Pixabay.com

The parties to the cooperation, which at the intermediate stage ended without any result, reported that the decision to abandon the creation of a virtual bank was due to the difficulties associated with investment investments and time constraints.

Japanese media claim that the project was temporarily canceled due to technical problems and forced switching the focus to the intensification of the fight against money laundering. Mizuho also suffered as a result of several failures in the operation of its systems.

The joint project of the mobile bank was presented by the parties of cooperation in 2018. The strategy of joint activity in the initial version provided that the digital lender would be launched in the 2020 fiscal year. This project was designed in such a way as to combine Mizuho’s banking heritage with Line’s millennial-oriented UX solutions and reach the younger generation of customers. The partners expected the digital bank to become a financial services provider for Line’s 94 million customer base.

The suspension of the project was good news for competitors. For example, Rakuten Bank, which is engaged in the implementation of a similar intention, attracted 13 million customers in the shortest possible time after the news about the postponement of the launch of a digital bank.

A joint statement by Line and Mizuho FG states that the parties to the cooperation, based on the results of the analysis of the current state of the project, decided that additional time and new investments are needed to create a convenient service with an acceptable level of security. They also noted that the partners’ capabilities do not yet allow them to offer customers a product that meets their expectations.

The joint venture, which is 66.6% owned by Mizuho and 33.4% owned by Line, will be dissolved. But this does not mean abandoning the project. The companies will return to the implementation of the joint initiative at a more favorable time for this. At the same time, it is obvious that the dissolution of the joint venture is a clear signal that there will be no resumption of activities to create a mobile bank in the near future.

In the foreseeable future, the partners will continue to work together on the already launched Line personal lending service.

As we have reported earlier, Mizuho Bank Implements Oracle Banking Tech.