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Japan: A coop bank that focuses on agri, fisheries, forestry

The Norinchukin Bank of Japan adopts technology to help agri, fisheries and forestry domains in the country:

The Norinchukin Bank, (translated Central Credit Union for Agriculture and Forestry (Cooperatives)) is a unique Japanese cooperative bank catering to the needs of some 6000 agricultural, fishing and forestry cooperatives in the country. Headquartered in Tokyo, the bank has an investment portfolio equivalent of US$400 billion, which is one of the largest in Japan. It also has assets in excess of US$840 billion.

The bank is basically established by Japan Agricultural Cooperatives (JA), Japan Fishery Cooperatives (JF), Japan Forest Owners’ Cooperatives (JForest) and other members of the agriculture, fishery and forestry cooperative system. As a private financial institution based on the Norinchukin Bank Law, the bank contributes to the development of Japanese economy and supports the agricultural, fisheries and forestry industries by providing financial services to its members.

3 CORE BIZ AREAS

With its substantial funding base, the bank finances its members, primarily agricultural, fishery and forestry workers, and companies related to these sectors. Its funding programs are available in Japan as well as abroad. The bank focuses on 3 business areas – food and agriculture business, retail business and investment business. It aims to be the ‘first call bank’ in the food value chain retail business providing a range of financial functions. The bank is also engaged in a number of other business activities, especially providing guidance for business and day-to-day matters for farmers, fishermen and foresters.

One noteworthy feature of the Norinchukin Bank it its efficient cash dispenser and ATM Network, addressing to the requirements of the agricultural and fisheries community in the country. The bank is also a member of the Multi-Integrated Cash Service (MICS) network, which facilitates a smooth operation of a cross-sector online alliance service of cash dispenser and ATM operators.

The bank manages a Cooperative Data Transmission System, which enables faster processing of data, and provides connectivity with unified IT infrastructure platforms for JA and JF and other financial institutions in the country.

NETWORK FOR TRANSACTIONS

The bank has an efficient network for customer transactions making use of the Cooperative Data Transmission System and the Norinchukin Online Banking System. It has a remittance service through the ‘firm banking’ system for cooperative banking customers.

CLOUD MIGRATION

One of its early decisions in tech upgradation has been the adoption of Amazon Web Services (AWS). While migrating the large-scale core system of JA Bank to the cloud, the bank updated its infrastructure as well. The bank expects that this migration of the database to Amazon Aurora can help it reduce its TCO by more than 10 billion Japanese yen over 13 years.

The bank’s core system, built in 2002 by integrating systems that had been operated within each prefecture, and named the ‘JASTEM System’, had 2 parts – an accounting system and an information system. The main function of the information system was to accumulate transaction information and customer information processed by the accounting system for use by the staff as well as for external relations activities and data analysis. The JASTEM system was initially operated in a mainframe COBOL environment but was made open subsequently and then virtualized and updated to IA server. It is this updated JASTEM system that was migrated to the cloud. The entire migration was completed in September 2022. The bank also made use of the AWS Professional Services, which specially helped it to create Security Architecture Implementation Guidelines based on FISC security standards and security design best practices provided by AWS.

HELPING FIELD STAFF

The Norinchukin Bank has also tied up with US cloud computing company Nutanix to help it scale flexibly to match the changing business needs and launch customer applications and services faster than before. The bank had an operational infrastructure using tablet devices for supporting onsite customer liaison activities. It adopted the Nutanix Cloud Platform as the medium-scale infrastructure for internet access for tablet devices used by liaison officers. It also used the Nutanix Technical Account Management (TAM) service, which now allows its officers promptly respond to questions that arise during daily operations, and provide daily support with a thorough understanding of the system through regular bi-monthly meetings.

INVESTMENT IN STARTUPS

The Norinchukin Bank has recently invested in AgFunder’s Agri-Food Tech Startup Investment Fund IV and has become a limited partner. The investment is part of a larger goal to build a more sustainable food system in Japan. The bank’s goals include a 50% reduction in greenhouse gas emissions by 2030 through sustainable development, and increase the incomes of food producers – farmers, fishermen and forest farmers. It wants to gain sufficient knowledge and understanding of the most advanced technologies in these fields, so investing in AgFunder’s fund can be seen as a way to achieve this.

The bank is also looking to partnering with startups, which have developed technologies in these fields, which can solve the challenges facing Japanese agriculture.

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This article has been compiled based on publicly available information on the web, particularly the bank’s own website.


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