Transforming Finance: Mitsubishi UFJ Financial Group's Vision for 2030 with IOWN Technology

Changes and Expectations Brought by IOWN to the Future of Finance

Yoko Inaba, Senior Manager, Innovation Technology Department, Technology Innovation Headquarters, NTT DATA Group (Inaba):

Looking ahead to 2030, assuming IOWN technology has advanced significantly, how do you see the future of Japan's financial industry from a global perspective?

Yuichiro Moto, Senior Managing Executive Officer, MUFG Bank (Moto):

Finance involves various functions like remittances and loans, which are tightly intertwined with country-specific regulations and international relations. Traditionally, humans have managed these complexities, but technology could streamline these processes, reducing errors and enabling the smooth operation of even more intricate financial systems. It's vital to pinpoint what needs safeguarding in finance while ensuring harmony with technological systems.

When global payments become fully integrated, I believe technology will help prevent crimes and secure transactions. Payments themselves have evolved - what was once bundled (e.g., paper money) has fragmented into digital forms like online payments, credit cards, and even delivery-linked transactions. This has created more complexity of payments. IOWN's high speed and low latency make it well-suited to manage these challenges seamlessly.

Inaba:

IOWN has applications beyond just communication and processing.

Moto:

Absolutely. IOWN has potential in diverse fields like intellectual properties content, robotics, and even space. While the full extent of its capabilities remains unclear, its integration with generative AI could vastly improve network and system infrastructure. Considering this, the technological singularity expected by 2030 might arrive sooner than anticipated, perhaps within just a couple of years.

Inaba:

The prospect of IOWN's early deployment is exciting.

Moto:

We are investing in Rapidus Corporation, a semiconductor manufacturer, because advanced semiconductors are crucial to reducing energy consumption across industries. This aligns with the evolution of IOWN technology and strengthens Japan's industrial competitiveness. Ultimately, we hope to contribute to a new, technology-driven Japanese society.

Inaba:

Your insights highlight the growing complexity in finance, especially with bundling and unbundling payment processes. It's clear that flexible, interconnected solutions like All-Photonics Network (APN) will become essential. I can see now why IOWN must deliver faster, more reliable technologies.

Moto:

In our business, while we continue to safeguard traditional services, like helping customers grow their wealth, IOWN enables entirely new benefits that are still emerging. These might include solutions in autonomous driving or assisting elderly individuals with dementia. Although we're still in the experimental phase, we're committed to exploring these possibilities and reshaping perspectives.

MUFG Bank's Participation and Initiatives in the IOWN Global Forum

Inaba:

MUFG is part of the IOWN Global Forum (IOWN GF), an industry group working to apply IOWN technology to real-world business. Could you explain why MUFG joined the forum and what you aim to achieve?

Moto:

For us, IOWN GF represents an ambitious initiative to drive global transformation using advanced technologies like photonic-electronic convergence and the APN. That's why we've been a sponsor member since 2021.

Today, as industries evolve with the integration of networks and technologies like generative AI, the forum's activities are helping redefine how society functions. At MUFG, we aim to utilise the insights gained from IOWN GF internally and share them with our customers. This aligns with our goal of becoming "the world's most trusted financial group". We want to seize the opportunity of leveraging IOWN to innovate within the industry while addressing societal challenges.

Take communication technology as an example. Just as mobile and smartphones have revolutionised industries, the financial sector has shifted towards smartphone-driven individual transactions. Through IOWN, we want to explore new opportunities, focusing on key improvements like reducing power consumption, boosting communication capacity, speeding up networks, and cutting latency. These technical advancements will directly benefit our customers and enhance MUFG's operations.

Inaba:

Thank you. This reinforces the need for reliable communication systems in terms of speed, volume, and quality, especially with the large-scale systems used in the financial sector and the daily online transactions handled by customers. It's clear that communication and processing times are bottlenecks for services. Technologies like APN could play a critical role in addressing these issues.

Besides daily operations, disaster recovery is another significant challenge. From a sustainability perspective, would you consider IOWN to be an essential technology?

Moto:

Absolutely. Ensuring both customer convenience and safety is a constant priority for us. IOWN's ability to support robust, long-distance communication systems, including reliable backups, makes it a powerful tool for us. Modern society faces numerous risks, including natural disasters, cyberattacks, and terrorism, so preparation is vital. That's why we focus on expanding IOWN use cases, identifying risks, and collaborating with customers to address challenges through Proof of Concept (PoC) projects.

(Note: IOWN GF, established in 2020, includes over 100 participating companies, research institutions, and academic bodies. It conducts use case studies, architecture design, and PoC projects to implement IOWN technology.)

Exploring Use Cases through PoC (Proof of Concept)

Inaba:

A platform like IOWN GF is invaluable. It brings together communication providers, IT service companies, and device manufacturers to exchange ideas and collaborate.

Moto:

Absolutely. Understanding IOWN's potential from a user's perspective and aligning it with our vision for system and service evolution, while collaborating with experts, yields crucial insights.

For instance, instead of centralising all data centres in Tokyo, we've explored dispersing them to nearby areas. This would allow for flexible switching and stable operations. Sharing these problem-solving approaches and insights with our clients, many of whom are business leaders, can help accelerate the societal adoption of IOWN technology. What truly matters is experiencing these solutions first-hand through PoC projects.

Our involvement in IOWN GF has significantly shaped our understanding and expectations of IOWN's capabilities. For example, it plays a vital role in connecting on-premises and cloud environments. To avoid "Galapagosization" - isolated systems that lack global compatibility - we need to define clear boundaries between stakeholders. This means determining where technology can ensure security and where regulatory oversight is required. Tackling these challenges requires collective effort and collaboration.

Inaba:

I completely agree. Allocating resources appropriately and ensuring systems can flexibly connect and adapt is critical. I look forward to working together to promote openness and collaboration.

Future Outlook

Inaba:

To wrap up, could you share your thoughts on the future you envision and any immediate milestones you're focused on?

Moto:

I see IOWN as a transformative tool that will not only reshape MUFG's system architecture but also revolutionise operations across industries. I believe this technology holds immense potential to address various social challenges through its application.

With this in mind, we're committed to advancing the financial use case PoC planned for this fiscal year, striving to deliver new value that benefits society in collaboration with the NTT Group.

Inaba:

Thank you for sharing your insights today.

Charting a New Path for Finance and Society with IOWN

MUFG's exploration of IOWN technology reflects its commitment to innovation and societal impact. By integrating ultra-efficient and intelligent systems, the financial giant is not just imagining the future but actively building it. As the world approaches a technological singularity, MUFG's pioneering work with IOWN could herald a new era of secure, efficient, and transformative financial services.