Why Global FinTech Startups Are Choosing Tokyo
Mark Walker, editorial director of the FinTech Times, interviewed Chang Li about Tokyo's growth as a fintech hub. Chang is an Ambassador for FinCity.Tokyo, head of Global Ventures and Partnerships at Nippon Life X Silicon Valley, and a director of the Fintech Association of Japan.
A huge market with finance on the doorstep
Chang said Tokyo has long attracted finance and fintech companies because of its size. It has a dense concentration of major banks, insurers, securities firms and Fortune 500 companies, and all of them can be reached with short trips across the city. That makes Japan a natural market for startups expanding globally.
An ecosystem built over many years
Chang stressed that the growth comes from a better ecosystem, and that it took years of effort from several groups:
Government support. FinCity.
Tokyo runs the Attraction U project, which gives fintech startups hands-on help entering Tokyo. The Tokyo government also hosts SusHi Tech, which brings together tens of thousands of entrepreneurs and investors from Japan and overseas.
Global talent. More multicultural, international talent is moving to Tokyo because people want to live and work there. That makes the city more attractive to fintech companies in turn.
Where the momentum is
Chang pointed to two areas:
Corporate collaboration. Japanese corporations have committed to open innovation for about ten years. People now move between startups and corporates, so big companies are much more used to working with startups.
Agentic AI. AI in operations is a strong trend this year, from customer support to back office and call centers. It brings demand for solutions in databases, cybersecurity and efficient use of AI tokens, and Japanese corporations welcome ideas from around the world.
Why Japanese corporations are open to global startups
Chang said local partners are easiest to work with because of language and context. Even so, she believes Japanese companies are open to global solutions, partly because of kaizen, the culture of continuous improvement. About ten years ago the first big fintech wave came from London and Silicon Valley, and Japanese corporations felt they needed to catch up. They sent teams like hers to global hubs and improved their internal decision-making for working with startups.
Support for companies coming in
Attraction U helps firms assess the market and size it against the US and Europe. It also offers business matching, help finding office space, and introductions to the right people for legal processes. Chang said asset management firms with more than $100 billion combined have come to Tokyo through the programs.
The Financial Services Agency's Financial Market Entry Office answers startups' legal questions by email, in English, within three business days. Chang said it will always try to find a way to help, even when the rules aren't ready for the question.
Business Development Center Tokyo is run by the Tokyo government and helps overseas firms set up an office.
The future is arriving faster
Chang noted that Netflix and Zoom took a few years to reach Japan, while ChatGPT and other AI tools arrived within months. The challenge is understanding Japan's culture, industry and regulation quickly enough to keep up. She wants more English-language disclosures and more PR about the support available. She hopes that within three to five years the best entrepreneurs will choose Tokyo as their first place to start a business.
Her advice to founders
Tokyo has excellent support, but success won't be easy. Chang recommends finding a good local partner, such as an IT systems integrator, a local consulting firm or another local company, especially if you don't yet have networks or context there. FinCity.Tokyo can introduce you to partners. Working with them lets global fintechs get the most from their technology.