Announcing the Start of New Internet Banking Operations

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1 July 17, 2018 GMO Aozora Net Bank, Ltd. Announcing the Start of New Internet Banking Operations All for our customers. Strive to be the No.1 Tech Bank. GMO Aozora Net Bank, Ltd. ( The Net Bank ) today announced that it has officially started its next-generation Internet Banking operations on July 17, 2018 with the aim of meeting new customer needs by leveraging its competitive advantage in advanced security authentication, blockchain, artificial intelligence, IoT, and new media. 1. Corporate Concept and Vision In recent years, thanks to the proliferation of smartphones, advances in financial technology, and the growing demand for internet banking among the younger generations, Japan has moved closer to becoming a cashless society. Furthermore, as a result of last June s Revised Banking Act, API collaboration between banks and Fintech operators have deepened, giving birth to new financial services such as more convenient payment services. Through the application of blockchain technology, expectations for breakthroughs regarding safer and more affordable payment and financial services continue to grow. In this market environment, the Net Bank aims to embody the following key concepts through its management philosophy of All for our customers. Strive to be the No.1 Tech Bank. (1) Provide low-cost banking services to SME and small-scale business Smartphone App operators, including e-commerce companies, to help increase productivity. (2) Provide attractive integrated banking and securities services to retail customers through a collaboration between GMO Click Securities, Inc. ( GMO Click Securities ) and smart, next generation features that make full use of IT. (3) Quickly develop new, differentiated services in association with GMO Internet Inc. ( GMO Internet ), Aozora Bank, Ltd. ( Aozora ) and their group companies, as well as external Fintech operators. (4) Use a system designed with cutting-edge IT technology that enables overwhelming cost-reduction measures to guarantee the provision of low-cost services. 1

2 The Net Bank aims to become the natural choice for customers to turn to as online transactions become more common. We are also developing products and services applying cutting-edge advancements such as blockchain and AI technologies and designed to deftly navigate new trends in the financial industry. We will become a platform bank that provides white label payment and financial infrastructures for all corporate industries, in the same way as internet domain and server infrastructures. 2. Providing Value The Net Bank aims to provide its customers with safety, speed, price competitiveness, convenience, and new experience. Safety Comprehensive security features for safe use, such as one time password for each transaction, biometric authentication, and high security card. Speed Price Convenience New Experience Provide a stress-free internet banking environment with improved processing speeds as well as a fast deployment of services through improved development times. Free withdrawals at ATMs and free fund transfers to other banks, both with the highest service standards in the industry. Customers can also receive special deals through various campaigns. Transactions can be made 24 hours a day, 365 days a year via PC or smartphone. ATMs can be used 24 hours a day at local convenience stores including Seven Eleven and cashless payments can be made with the integrated debit card. Provide opportunities to experience new financial services such as Multi-purpose Accounts that grant the ability to manage cash for varying purposes, Transfer Receipt Accounts that allow for more efficient management of payment receipt operations, as well as Open API payment/settlement and financial products and services. 3. Products and Services Using the latest technology and the GMO Internet Group s internal system development framework to lower costs, we are able to provide the industry s most cost effective products and services. In addition to retail and corporate yen ordinary deposits and yen time deposits, the Net Bank plans to introduce the following products and services one-by-one over the course of its first year of operation. (1) Retail Banking Virtual Account Multi-purpose Account Multi-purpose accounts make managing money more convenient. It allows retail customers to 2

3 create up to 10 sub-accounts within their ordinary deposit account free of charge, and designate each account with a different purpose, such as living expenses, rent, education expenses, pocket money, etc. Customers can also set up automatic transfers from their main account to their various multi-purpose accounts. (2) Virtual Account for Corporate Customers Transfer Receipt Account Transfer receipt accounts help corporate customers more efficiently manage their payment receipt operations. These accounts create temporary virtual account numbers for each customer or service to handle billing and payments. This feature helps lower the operational burden of complex payments that stem from balance and account name differences. Corporate customers with Net Bank accounts can use their transfer receipt accounts with no associated registration fees or monthly charges. (3) Securities Connect Account (Integrated Banking and Securities Accounts) For customers that have a securities account with GMO Click Securities, funds in their Net Bank account will automatically reflect the buying capacity of their securities account. With this, stock transactions can be performed using the total amount of funds in both the Net Bank and securities account. Balance charges associated with stock trading can also be automatically transferred from a GMO Click Securities account to a Net Bank Account on the settlement date (Automatic Sweep). (4) Foreign Currency Deposits Through a collaboration with GMO Click Securities, which has the world s No. 1 highest FX trading volume (Finance Magnates Survey, Jan Dec. 2017), we aim to provide foreign currency deposit services with favorable interest rates, real-time foreign exchange rates, and competitive exchange fees. Our UI/UX was developed by utilizing GMO Click Securities technology. The Net Bank will accept eight foreign currencies (USD, EUR, GBP, AUD, NZD, CHF, CAD, ZAR). (5) Battery-Powered Interactive Debit and Cash Card GMO Aozora Net Bank ATM cards are equipped with standard VISA debit features and can be used at Visa affiliated locations for cashless purchases. In collaboration with U.S.-based Dynamics Inc., we plan to release the world s first battery-powered, interactive debit and cash cards during the spring of It utilizes a user-determined passcode to provide access to debit and ATM services, guaranteeing physical security in the case of lost or damaged cards. 3

4 Battery-Powered Interactive Debit and ATM Cash Card Image 4. Future Development of Products and Services Going forward, the Net Bank will rapidly introduce loan and credit card related services to meet a wide range of customer needs. We plan to begin offering a reference system API (for account balance inquiries and withdrawal/deposit details) in Jan and an update system API (for wire transfers and payments) in Apr By expanding our API-based features, we hope to further our development as a platform bank (open API payment/settlement services patent pending). We also plan to develop new payment methods utilizing blockchain technology in association with cyptocurrency operations implemented by the GMO Internet Group. The following is a mid-term product and services development road map outlining the first few years from the start of our operations. Mid-term Product and Services Development Road Map 4

5 5. Opening an Account Applications for opening a Net Bank account can be submitted online via the following website (only in Japanese) starting today, July 17. Retail Customers: Corporate Customers: Once the account application has been processed, banking transactions, scheduled to begin on August 3, can be completed using a PC or smart phone. Any local Seven Bank ATM can be used to make withdrawals, deposits, and check account balances. In addition, the use of Aeon Bank ATMs is planned to be made available in the spring of Overview of GMO Aozora Net Bank GMO Aozora Net Bank is a joint venture that combines Aozora s banking and risk management expertise with GMO s internet technology capabilities, e-commerce market services, and online securities experience. Name GMO Aozora Net Bank, Ltd. Location 26-1 Sakuragaoka-cho, Shibuya-ku, Tokyo Representatives Takehito Kaneko, Chairman, Representative Director Masaki Yamagata, President, Representative Director Operations Banking, trust services Capital 8.7 billion yen (as of March 31, 2018) Established February 28, 1994 Ownership Aozora Bank, Ltd. (85.1%) Structure GMO Internet, Inc. (7.45%) (Voting Interest) GMO Financial Holdings, Inc. (7.45%) 5

6 Related Materials: June 24, 2016 Aozora Announces Capital and Business Alliance for Joint Venture Internet Bank with GMO Internet, Inc. URL: October 19, 2017 Aozora Trust Bank Announces Change to Corporate Name; Launch Date for Internet Business" URL: June 1, 2018 Aozora GMO Net Bank Announces Completion of Change to Corporate Name and Relocation of Headquarters URL: 6