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Friday, December 8, 2023

Bringing together each other's assets creates new value. Collaboration with goal-oriented startups

Sumitomo Mitsui Card was established in 1967 and has been developing its business and services in Japan and overseas. The company continues to evolve to provide "comfortable moments" to many people through various services centering on payment services. In 2017, the company launched a new business development organization to create new businesses in areas other than credit cards. The company then entered the Creww accelerator program. What exactly was the process of creating new businesses? We interviewed Kei Nagata, Group Manager of the Corporate Planning Department, and Hiroaki Ki, Deputy General Manager of the Membership Service Development Department, Marketing Division, who were in charge of new business development at the time.

If we combine our strengths, we can create new value.

-What was the impetus for SMCC to start the accelerator program?

Mr. Hiroaki Ki, Deputy General Manager, Member Service Development Department, Sumitomo Mitsui Card Co.

causeIn the FY2017 Mid-Term Management Plan, an organization called the New Business Development Office was established to create a new business that could be the "next pillar" in an area different from the main business of credit cards. At first, the organization was established, but we had not yet decided on the approach to be taken.

In the process of visiting and interviewing various companies involved in new businesses to learn their methods and gain knowledge, we learned about the Accelerator Program and Creww.

Originally, we decided to introduce the accelerator program as an opportunity for new business, as we thought it would be faster to work with a young company like a startup to tackle a new business in an area different from our existing business.

-Did you encounter any opposition from within the company when you introduced the system?

causeThe New Business Development Office was a small organization created within the Corporate Planning Department, and we were limited in our ability to create new businesses based on our own knowledge.

When we launched our accelerator program, we received a surprisingly large number of applications. Four of them went on to conduct demonstration experiments, and in the end, we are still in a relationship with Knightley. From the very beginning, we had a goal image with Knightley that we could create new value by bringing together our mutual assets and combining them.

long rice fieldKnightley is a startup with unique location data collection and analysis technology that focuses on movement and stay information, and had been providing inbound insight, a service to support foreign visitors to Japan by analyzing their stay, tour, and interests. We have credit card payment data of foreigners visiting Japan, so if we team up with Knightley, we can find out "What kind of spending do foreigners visiting Japan do in which areas?

Mr. Kei Nagata, Group Manager, Corporate Planning Department, Sumitomo Mitsui Card Co.

We thought that if we commercialized this service, we could offer it to companies and municipalities that want to implement inbound measures. Moreover, it would solve our problem of not being able to utilize the large amount of credit card payment data we had. So, the conversation proceeded smoothly.

After repeated internal discussions, we focused our wisdom to realize the demonstration experiment.

-If you were able to envision the goal from the beginning, did the demonstration go quite smoothly?

long rice fieldThe process was smooth with Knightley, but there were many internal discussions about whether it was really the right thing to do before we presented it to the board members.

cause: The discussion was heated with quite specifics about who would actually use the data and what the benefits would be for the customer. In addition, there was a discussion about why Knightley and whether it is the right decision, given that there are many companies that make a living utilizing data.

This discussion came about because we had a clear goal, and that is how fortunate we were to have such a group of serious thinking members. However, we cannot afford to waste start-up time by prolonging our discussions.

long rice fieldThe time value and financial impact are different. For us, it was just a demonstration experiment, but for a startup, the time it takes to get to a demonstration experiment and the success or failure of the experiment can make or break the startup. That's why we were serious about facing it head-on.

-How long did it take from presentation to commercialization?

long rice fieldI think it took less than six months because we combined data and technologies that we both had, rather than creating something new from scratch.

causeThe reason for the speedy progress was that we were able to obtain cooperation from the business division, which was the execution unit, at an early stage and had them participate from the demonstration experiment.

Since the project had originally been carried out solely by the Corporate Planning Department, we knew that the issue would be whether we could successfully pass the baton when we entered the practical phase. We were happy that the business division participated in the discussions at an early stage, and I think that is why the assets that Knightley had were so great.

The results of data utilization with Knight-Ray will contribute to future data strategies.

-The Accelerator Program is a 2017 initiative. Has the culture of creating new businesses continued since then?

long rice fieldCurrently, the Strategic Business Development Department has taken over the work of the New Business Development Office, which continues to introduce new overseas technologies and renovate and develop existing businesses in a form that integrates them with the core business.

cause: SMCC has a history of working on new things and continuing to evolve. So it is not a "defensive posture.

long rice field15 years ago, cash was the norm in our society, but today there are many different payment methods, such as cashless payment, and the development of these methods is rapid. In order to survive and gain market share in the "●● Pay Warring States Era," it is necessary to have a data strategy.

We want to continue collaborating with other companies to make our new business "Custella" a success.

-What are the future plans for Sumitomo Mitsui Card?

long rice fieldIn October 2019, we launched a new service called Custella, a data analysis support service, which will make visible customer attributes and consumption behavior by statistical analysis of our cashless data in such a way that neither individuals nor merchants can be identified.

The former is an online tool that allows users to view their company's sales, customer demographics, and other information at any time for use in marketing and sales activities, while the latter is an online service that allows users to view their company's sales and customer demographics at any time for use in marketing and sales activities. The former is an online tool that allows you to view your company's sales and customer demographics at any time for use in marketing and sales activities.

The latter is a fully customized service that analyzes a variety of data according to the needs of each merchant, and considers everything from how to implement a strategy to verification of its effectiveness. This is exactly what Custella Analytics does for the business with Knightley.

So the business with -Knightray is now under the umbrella of a new business.

long rice fieldYes, that's right. However, since Custella is a newly established service, our immediate task is to make it a viable business. For example, we would like to develop a system that would allow merchants to promote their customers by age and behavior.

Specifically, we would like to evolve this service into a 1-to-1 marketing service whereby customers who visit a merchant store on a rainy day will receive a discount coupon on their smartphone that can be used only on that day.

causeI am now able to think about whether I can collaborate with startups when I work on something, which is a great asset. I would like to make the Custella project a success by collaborating with various companies, including Knightley, rather than doing it all on my own.

Mr. Hiroaki Ki Sumitomo Mitsui Card Co.
Vice President, Member Services Development Dept.
Joined Sumitomo Mitsui Card in 2000. After working in the Sales Planning Department and the Planning Department, he has been in charge of the sales planning division. In the Member Service Development Department, he is in charge of planning and managing the life insurance agency business.
Mr. Kei Nagata Sumitomo Mitsui Card Co.
Group Manager, Corporate Planning Department
Joined Sumitomo Mitsui Card in 2003. After working in the sales division, bond collection division, and business planning division of finance. In the Corporate Planning Department, he is responsible for the formulation of mid-term management plans, organizational revisions, and the management of various meetings.
writing (e.g. as a profession)
Tomomi Tamura 
He joined Snow Brand Milk Industry in 2000. He then worked for an advertising agency and as a sole proprietor before joining BizReach in 2012. Engaged in content creation, he joined NewsPicks in 2016 as an editor on the BrandDesign team, and is now a freelance writer and editor.

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Tomomi Tamura
He joined Snow Brand Milk Industry in 2000. He then worked for an advertising agency and as a sole proprietor before joining BizReach in 2012. Engaged in content creation, he joined NewsPicks in 2016 as an editor on the BrandDesign team, and is now a freelance writer and editor.
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