Market Insights Financial Wealth Management

Digital Investment - Japan

Japan

Total transaction value in the Digital Investment market is projected to reach €57.30bn in 2024.
Total transaction value is expected to show an annual growth rate (CAGR 2024-2029) of 2.28% resulting in a projected total amount of €64.13bn by 2029.
Neobrokers dominates the market with a projected total transaction value of €35.69bn in 2024.
The highest cumulated transaction value is reached in the United States (€1,635,000.00m in 2024).

Key regions: United Arab Emirates, Switzerland, Singapore, United Kingdom, Europe

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Analyst Opinion

The Digital Investment market in Japan has been experiencing significant growth in recent years, driven by changing customer preferences, emerging trends, and local special circumstances.

Customer preferences: Japanese customers have shown a growing interest in digital investment platforms, as they offer convenience, accessibility, and a wide range of investment options. With busy lifestyles and a high level of technological adoption, Japanese investors are increasingly turning to digital platforms to manage their investments. These platforms provide users with the ability to invest anytime, anywhere, and offer features such as automated portfolio management and real-time market updates, which are highly valued by customers.

Trends in the market: One of the key trends in the digital investment market in Japan is the rise of robo-advisors. These automated investment platforms use algorithms and artificial intelligence to provide personalized investment advice and manage portfolios on behalf of customers. Robo-advisors have gained popularity due to their low fees, ease of use, and ability to cater to a wide range of investment needs. This trend is expected to continue as more investors recognize the benefits of robo-advisors and as the technology behind them continues to improve. Another trend in the market is the increasing popularity of socially responsible investing (SRI). Japanese investors are becoming more conscious of the environmental, social, and governance (ESG) factors associated with their investments. They are seeking investment opportunities that align with their values and promote sustainability. Digital investment platforms are responding to this trend by offering a range of SRI products and integrating ESG criteria into their investment strategies.

Local special circumstances: Japan has a unique demographic profile, with an aging population and a declining birth rate. This has led to a shift in investment preferences, with a greater focus on long-term planning and retirement savings. Digital investment platforms are well-positioned to cater to this demographic, as they offer tools and resources that help investors plan for their future and navigate the complexities of retirement planning. Additionally, the Japanese government has been actively promoting digitalization and financial technology (fintech) initiatives, creating a favorable environment for the growth of the digital investment market.

Underlying macroeconomic factors: The digital investment market in Japan is also influenced by underlying macroeconomic factors. The low interest rate environment in the country has made traditional savings and investment options less attractive, leading investors to seek higher returns through alternative channels. Additionally, the COVID-19 pandemic has accelerated the adoption of digital solutions across various industries, including finance. As more people embrace digital platforms for their financial needs, the digital investment market is expected to continue its growth trajectory. In conclusion, the Digital Investment market in Japan is experiencing growth due to changing customer preferences, emerging trends such as robo-advisors and socially responsible investing, local special circumstances including an aging population and government support for fintech, and underlying macroeconomic factors such as low interest rates and the impact of the COVID-19 pandemic. This market is expected to continue expanding as more Japanese investors recognize the benefits and convenience of digital investment platforms.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.