Rakuten Plans Integration of Bank and Fintech Businesses

Japanese technology conglomerate Rakuten has announced plans to integrate its fintech unit with Rakuten Bank. This comes as part of its plan to strengthen collaboration and customer acquisition in areas including online banking, credit card issuance and insurance. 

The deal sees Rakuten Group and Rakuten Bank enter into a memorandum of understanding on the planned business reorganisation. 

This realignment is set to take effect in October, with Rakuten Group and Rakuten Group entering into a memorandum of understanding. Rakuten Bank is still expected to be independently listed in the Tokyo exchange following its integration with the wider group.

Rakuten: Reorganisation to stem tide of losses 

Indeed, Rakuten’s planned reorganisation comes after significant, sustained losses suffered since 2020 and the COVID-19 pandemic.

The company’s flagship e-commerce platform Rakuten Ichiba has suffered 14 straight quarters of operating losses since 2020, a time when the firm also launched a mobile carrier arm. 

Now almost four years on, Rakuten’s plans to build more secure networks for its carrier division – plans shared with Mobile Magazine at MWC Barcelona 2024. 

Nagendra Bykampadi, Rakuten Symphony Global Head of Product Security, told Mobile Magazine: “A lot of our software needs to be compliant with O-RAN Alliance standards. 

“We have shifted to include what we call ‘product security guidelines/requirements’. The whole idea is that every Rakuten Symphony product adheres to a certain set of security principles.”

Rakuten has undertaken several cash-generating initiatives to combat sustained losses, issuing equity and debt, and selling assets by publicly listing Rakuten Bank in 2023. 

2023 also saw Rakuten attempt to list its securities arm, a move that was delayed before Rakuten eventually sold a 30% stake in its securities arm to Mizuho Financial Group. 

With plans to integrate Rakuten Bank into the wider group, its attempts to list its securities arm publicly may now be dropped. 

In more positive fund-raising efforts, Rakuten Group has recently boosted a junk bond sale to US$2bn amid efforts to attract investors with a yield significantly higher than similarly rated debt.

According to Bloomberg, Rakuten priced the five-year notes to yield 9.875%. 

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