Initiatives to Strengthen Asset Formation Support Functions
Initiatives Undertaken by the Resona Group
In May 2023, the Resona Group established its Purpose (“Beyond Finance, for a Brighter Future”) and Long-Term Vision (“Retail No. 1: The ‘Solution Group’ most supported by customers and regional societies as it walks with them into a brighter future together”), building on the founding spirit that continues to govern its business management.
Guided by the philosophies described above, the Resona Group is striving to assist as many customers as possible in their asset formation efforts so that they are economically prepared for the coming age of centenarians. Believing that doing so is instrumental to the creation of a brighter future for customers and regional societies, we have positioned asset formation support and corporate pension businesses as our fields of focus and part of our management strategies.
To best provide a broad range of customers with access to high-quality solutions backed by the asset management know-how we have nurtured through more than 60 years of pension asset management, we must maintain appropriate standards of corporate governance and stay true to our focus on serving the best interest of customers in the course of business management even as we tirelessly work to enhance asset management capabilities. We therefore consider these initiatives to be essential components of the Group’s management strategies.
To support households’ efforts to achieve stable asset formation, it is important to promote the vitalization of Japan’s economy as a whole by contributing to the investment chain. This will help to increase asset-based and other household income among a broad range of citizens and further invigorate investment and personal consumption. Accordingly, as defined under our Purpose, we will strive for the realization of a brighter future-one that is as hopeful and reassuring as it is exciting-in an ever-changing world. To this end, we will rally the entire strength of the Resona Group.
Overview of Our Planned Initiatives
The Resona Group is a financial service group equipped with an asset management company and full-line trust banking capabilities that boasts a customer base consisting of 16 million individual customers and 500,000 corporate customers. Aiming to become “Retail No. 1,” we will fully leverage these strengths to help create a brighter future for customers and regional communities.
What We Aim to Be (Jan. 2024)
How We Expand Value Delivered through the Asset Management Business
Toward the Upgrading of Our Asset Management Capabilities
We will promote the upgrading of our asset management capabilities by focusing on enabling Resona Asset Management - the Group’s asset management company - to increase the sophistication of its governance systems and nurture its human resources.
Resona Asset Management was established in August 2015 as a wholly owned subsidiary of Resona Holdings. To promote the upgrading of our asset management capabilities, we have positioned this subsidiary as a key Group entity specializing in this field in line with the conviction that an asset management company must be independent from other Group entities with regard to such aspects as governance and personnel systems.
Looking ahead, we will consider the formulation of succession plans for Resona Asset Management’s top management, the introduction of additional compensation and incentive plans for its high-performance employees, and other measures aimed at enabling it to secure a higher degree of independence, realize more robust governance and undertake more effective human resource development.
Main Initiatives Undertaken by Resona Asset Management
【Initiatives undertaken thus far】
- Established unique personnel systems independent from those in place at other Group companies to set wages for and evaluate the performance of human resources specialized in asset management (Apr. 2008)
- Began evaluating asset management performance via the use of external consultants and established an incentive system linked with the results of such evaluation (Apr. 2008)
- Strengthened the global asset management product structure based on in-house asset management and began the full-scale operation of this structure (Jun. 2011)
- Adopted the company with an audit and supervisory committee system (with two out of the six members of the Board being independent outside directors as of Jan. 2024)
- Appointed a representative equipped with extensive asset management experience (as of Jan. 2024)
【Future initiatives】
- Increase the sophistication of governance to grow into an even more reliable asset management company
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- Formulate succession plans for the president and the officer in charge of the asset management divisions while defining the core competencies required for these positions
- Disclose concepts with regard to product governance as well as evaluation results for asset management performance and costs incurred, etc.
- Upgrade asset management capabilities by nurturing specialist human resources and strengthening the relevant structure
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- Further upgrade the compensation system to better motivate high-performance employees and improve their retention
- Develop a candidate selection program to enhance the overall competencies of individuals tasked with asset management
- Disseminate asset management-related information and provide financial education focused on raising public literacy of long-term, dispersed investment
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- Brush up educational programs and continue dispatching employees to external seminars and school classes to serve as lecturers
Asset Management Structure and Human Resources
Developed a structure for enabling us to strengthen our focus on asset management (As of Sep. 30, 2023)
Number of staff in asset management-related divisions: 129 (approx. 66% of overall employees)
Number of staff in client service and corporate divisions: 65 (approx. 34% of overall employees)
External Evaluation* of our Asset Management Capabilities
- *Including products provided by Resona Bank for pension asset management
Helping Customers Exercise Their Asset Owner Functions
We have amassed extensive know-how in pension plan design and administration as well as in asset management and administration over the course of more than 60 years of corporate pension management. We will leverage the strength of this experience to focus on such undertakings as enhancing our customer support structure for business operators implementing corporate pension plans and helping raise the awareness of persons enrolled in corporate pension plans.
The Resona Group is a retail commercial bank equipped with full-line trust banking capabilities while boasting extensive know-how amassed over the course of more than 60 years of corporate pension management in pension plan design and administration as well as asset management and administration. Leveraging these strengths, we strive to support business operators who implement, and are asset owners of, corporate defined benefit (DB) pension plans and defined contribution (DC) pension plans, providing them with access to our specialist expertise so that they can raise their asset management capabilities. We also maintain a focus on expanding our customer base for corporate pensions and helping raise awareness among persons enrolled in corporate pension plans.
Going forward, Resona Group banks will work together to deliver asset management products and pension plan operation services to a broad range of corporate customers encompassing SMEs through large enterprises . At the same time, we will assist these customers in the introduction of corporate pension plans and help them stably operate such plans even as they raise their asset management capabilities. To this end, we will provide proposals on the introduction of pension plans, support the operation of such plans and otherwise provide consulting. Furthermore, we will offer an even broader range of information to business operators who implement corporate pension plans as well as persons enrolled in such plans, furnishing them with explanatory materials, holding seminars, releasing web-based content, publishing books and employing all other tools and content available.
Main Initiatives Undertaken by Group Banks
- 1.Pension plan consulting and support
- Assist business operators, especially SMEs, who implement, and are asset owners of, DB corporate pension plans and corporate DC pension plans, in pension plan design and operation even as we provide them with access to our specialist expertise and help them raise their asset management capabilities
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- Deliver corporate pension-related solutions to a broad range of corporate customers from SMEs to large enterprises
- Develop products designed to contribute to pension asset management by, for example, enhancing the lineup of alternative vehicles, etc. (with options including independent investment aimed at discovering excellent asset managers), and transitioning to generalized investment methods and small-lot investment
- 2.Comprehensive asset formation advisory services
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- Provide asset management expertise, product information, insights into legal revisions and other information by utilizing, for example, various seminars and websites
- 3.Japan’s largest channel network
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- Utilize every available channel to assist persons enrolled in corporate pension plans, retirees and other individual customers in their asset formation and management efforts
【Examples of services for enrollees】
- Seminars on smart ways to receive pensions
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- Drawing on case studies, address such topics as differences in the various ways pensions can be received while delivering tips on how to select pension plans that suit individual life plans
- Multi-life-planning seminars
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- Co-host seminars in tandem with business operators implementing corporate pension plans to help improve employer-employee engagement, instill awareness of asset management and enhance the asset management mindset among workforces
Delivering Products and Services Focused on Helping Customers Achieve Stable Asset Formation
Ensure that the provision of our products and services is always focused on helping customers achieve stable asset formation by, for example, developing a product introduction process, upgrading incentive systems for our salespersons and enhancing opportunities available to them for training that helps raise their consulting capabilities.
The majority of individual financial assets in Japan still comprises cash and deposits. In the coming age of centenarians, supporting a major shift from savings to investment is an integral part of our mission as a financial institution.
We are equipped with a robust retail customer base that has been developed by Group banks over a long history. We will provide this customer base with services backed by the asset management know-how we have amassed in our more than 60 years of corporate pension-related operations to support stable asset formation.
We are aware that many customers understand the necessity of asset management but are uncertain about how to proceed. In response, in August 2023 we updated Resona Group App by installing additional functions designed to provide app users with proposals on savings-type investment methods in light of their targets and enable them to complete all processes in purchasing investment products. Looking ahead, we will rally the Group’s entire strength to deliver value via both face-to-face and digital channels even as we promote a retail business aimed at assisting Japan’s general public in their asset formation efforts.
Main Initiatives Undertaken by Group Banks
- Establish a sales structure focused on helping customers achieve stable asset formation
- Unify performance evaluation methods for salespersons in charge of products in the same segment
- Develop a product introduction process via, for example, the introduction of product evaluation by a third party and comparisons with similar products offered by other companies
- Provide job rank-based training, operate an in-house university and otherwise help employees raise their consulting capabilities
Initiatives to Enable the Smooth Realization of Investment Chain Functions
Promote the Widespread Practice of Customer-Oriented Business Conduct
We will rally Group-wide strengths to promote the widespread practice of Customer-Oriented Business Conduct in all business fields beyond the scope of the asset formation business.
In line with its Behavior Guidelines, the Resona Group places the utmost value on helping customers realize joy and happiness and thus endeavors to deliver optimal services. We consider these efforts to be essential to securing our customers’ best interests and thus consider Customer-Oriented Business Conduct to be an instrumental initiative. In March 2023, we updated our Fiduciary Duty Basic Policies centered on governing the asset formation business in order to increase the sophistication of this initiative. Simultaneously, we formulated Customer-Oriented Business Conduct, a set of policies applicable to all business fields. In June 2023, we updated our Fiduciary Duty Initiative Policies designed to describe specific initiatives to be undertaken by Group banks while reviewing our key strategies for the asset formation business in the context of the medium-term management plan (MMP).
We expect our employees to cultivate sophisticated specialist expertise and act with robust attention to ethics as fiduciaries entrusted with customer assets while taking a sincere and fair approach to providing high-quality financial services in line with the conviction that serving customers’ best interests means helping them realize joy and happiness. We will therefore continue undertaking fiduciary initiatives in addition to periodically reviewing our Initiative Policies and otherwise striving ensure that the business management endeavors named above translate into a widespread corporate culture.
Main Initiatives Undertaken by Resona Asset Management and Group Banks
In April 2021, Resona Asset Management established the Fund Governance Meeting consisting only of outside directors and began regularly verifying the appropriateness of product features and asset management quality.
- Help corporate customers resolve issues confronting them via interviews based on the REENAL method (Resona Bank)
Propose solutions after diagnosing business styles of and clarifying management challenges confronting corporate customers via the use of a proprietary interview sheet - Established the Kurashi Concierge (Saitama Resona Bank)
Set up a one-stop consulting desk designed to accommodate a comprehensive range of household finance-related inquiries to ensure that our customers can casually seek consultation - Established FD commendation systems (Kansai Mirai Bank, Minato Bank)
Created in-house commendation systems designed to draw employee attention to model initiatives in terms of practicing Customer-Oriented Business Conduct in order to promote the entrenchment of a corporate culture focused on taking action to best serve customers
Helping Increase Financial Literacy
Contribute to the enhancement of the general public’s financial literacy so that everyone can autonomously draw up life plans.
Today, functions afforded by financial institutions are increasingly considered to be of great importance in terms of helping raise the general public’s financial literacy and contributing to its financial well-being due to such changes in the social environment as a growing sense of anxiety about the future due to the low birthrate and an aging society and the increasing number of financial crimes in which younger people are victimized.
The Resona Group has been an industry pioneer in the provision of financial and economic education. For example, in 2005 we began operating Resona / Mirai Kids’ Money Academy for elementary school students. As of January 2024, the cumulative total number of children who have completed the academy’s programs amounts to approximately 46,000. Instilling robust financial literacy not only helps customers in a broad range of age groups enhance their living standards, but also contributes to the future development of regional societies and economies. Accordingly, we will remain proactive in providing this education as a financial service group that is deeply rooted in communities.
Going forward, we will strive to enhance support measures designed to instill robust financial literacy so that everyone can autonomously design their lives. To this end, we will enhance the relevant educational content while providing customers with information through our main business. In these ways, we aim to ensure that the Resona Group is our customers’ first choice in terms of seeking finance-related consultation.
Main Initiatives Undertaken by Group Banks
- Resona Group Kids’ Money Academy
- On-site lectures for young people ranging from elementary school to university students, endowed courses and internships
- Seminars held for the employees of corporate customers, such as business operators who entrust their pension assets to us, and seminars focused on preventing special fraud
- Dissemination of information via SNS and YouTube
FY2023 results (As of Dec. 31, 2023)
Number of events held: 2,494
Number of participants: 36,944
Facilitating Stewardship Activities
Focus on further enhancing the effectiveness of stewardship activities via, for example, nurturing human resources at Resona Asset Management.
Helping Japanese corporations achieve sustainable growth and medium- to long-term improvement in corporate value is essential to enabling the country’s investment chain to fully realize its functions. With this in mind, Resona Asset Management has established the Responsible Investment Policy, referencing the United Nations Principles for Responsible Investment (PRI), for which the company declared its support, and Japan’s Stewardship Code, with its asset management divisions currently consolidating their insights to promote stewardship activities.
Looking ahead, we will strive to increase the sophistication of initiatives described below while enhancing the effectiveness of our stewardship activities via, for example, the in-house development of human resources tasked with engagement (especially, human resources equipped with specialist expertise in such fields as ESG). These initiatives will, in turn, enhance our ability to fulfill stewardship responsibilities.
Main Initiatives Undertaken by Resona Asset Management
- Introduce a platform for sharing engagement-related information and develop supportive tools (“Resona ESG Assessment, ” AI-based evaluation of integrated reports, etc.)
- Clarify the PDCA cycle-based process for dialogue and engagement by establishing Dialogue and Engagement Policies and Dialogue and Engagement Plans
- Reinforce the structure and functions of the Responsible Investment Division, which specializes in stewardship activities, by, for example, transferring staff from other divisions and hiring external human resources while taking a proactive approach to joint engagement to acquire insights from and utilize resources afforded by external partners
- Dispatch employees to serve as lecturers for university and graduate school courses focused on responsible investment as part of efforts to nurture human resources who will create the next generation
- Promote the upgrading of stewardship activities and make such activities more effective by operating a PDCA cycle incorporating external assessments, such as PRI assessments, in addition to undertaking the self-assessment of the activities’ effectiveness
- Formulate effective standards for the exercise of voting rights (e.g., standards regarding policy-oriented stockholdings, the presence of outside directors and female officers, anti-takeover measures) while exercising voting rights in a manner that is consistent with engagement
Toward Achieving Sustainable Corporate Growth
Promote various initiatives to secure sustainable growth for Resona Holdings itself and achieve medium- to long-term improvement in corporate value.
Resona Holdings itself constitutes a component of the investment chain. With this in mind, we are promoting initiatives to achieve sustainable growth and medium- to long-term improvement in corporate value.
Moreover, Resona Holdings has adopted all principles of the Corporate Governance Code. Aiming to acquire a robust market reputation backed by a PBR of more than 1 time, we are particularly intent on robustly improving profitability and asset efficiency through, for example, the effective utilization of capital.
Resona Holdings’ Financial and Non-Financial Approaches to Improving PBR-Based Market Ratings
- Acceleration of income and cost structure reforms
- Full-scale utilization of capital
- Upgrading of balance sheet management
- Enhancement of engagement via investment in human capital
- Enhancement of financial and non-financial information to be disclosed