Customer-Focused Business Operations

Policy on Initiatives

As part of our commitment to customer-oriented business operations, we have formulated and published our “Declaration of Fiduciary Duty”, which was approved by the Board of Directors. The Bank of Yokohama, the Higashi-Nippon Bank, and THE KANAGAWA BANK have adopted a policy based on this Declaration and are working to conduct customer-focused business operations.

Fiduciary Duty Declaration

Customer-oriented Support for Asset Formation and Management

1.The Group shall focus on its customers and support the formation of portfolios that are appropriate for customers’ life stages, and consistent with their true needs and interests.

  • In light of the customer's asset and liability situation, knowledge, experience, and objectives for asset formation and management, we will consider an appropriate portfolio based on the customer's life plan and other factors, and propose products and services that meet the customer's needs.
  • The Group shall provide support that contributes to customers’ investment returns over the medium-to long-term.

Provision of the Optimal Investment Products

2.After accurately identifying customers’ needs, the Group shall provide products that contribute to customers’ asset formation and management over the medium-to long-term.

  • The Group shall prepare a wide range of investment products to allow it to fulfill the varied needs of its customers.
  • After examining the characteristics, risks, and other factors related to various products offered by investment management companies and insurance companies, the Group shall provide products that contribute to customers’ asset formation and management, and suggest portfolios that take diversified investment into consideration.

Provision of Information to Customers

3.The Group shall accurately and promptly inform customers of information related to investment products, market trends, and other information.

  • In proposing investment-type products, we will use plain terms and expressions and IT tools to explain important information related to products and services in a way that is easy to understand even for customers with little investment experience, so that they can be convinced.
  • The characteristics, risks, etc., of the investment-type products we propose will be explained in an easy-to-understand and careful manner so that customers can sufficiently understand them in accordance with the complexity and degree of risk of the products, using materials that make it easy to compare them with similar products.
  • Through the provision of information on the status of assets held and market trends, etc., we will provide timely and appropriate follow-up services in accordance with the objectives of each customer's asset formation and management, taking into consideration the long-term perspective.
  • The Group shall enhance transparency, including through providing information related to various fees, in order to contribute to customers’ investment decisions.
  • The Group shall promote support for financial education, in order to enhance the financial literacy of regional communities.

Appropriate Management of Conflicts of Interest

4.The Group shall appropriately manage the selection of products and provision of information to customers, to ensure that customers’ interests are not unfairly harmed.

  • The Group shall select high quality products and provide appropriate products to customers, without bias based on fees paid by companies providing products or being Group companies’ products.

Creation of a Structure that Prioritizes Customer Satisfaction

5.The Group shall create an appropriate sales structure that contributes to enhancing customers’ investment results, and shall build systems to verify its effectiveness.

  • The Group shall create various channels as it strives to create an environment where customers can engage in discussions with peace of mind, as well as to enhance convenience for customers.
  • The Group shall build an evaluation system for employees that takes into consideration initiatives consistent with customers’ needs and interests, and relationships of trust with customers.
  • The Group shall regularly measure customer satisfaction in regard to its services, and build internal systems to reflect feedback from customers in improvements to products and enhancements to services.

Training and Securing Personnel

6.Aiming to provide optimal financial services to our customers, we will develop highly specialized human resources in the field of finance and cultivate a strong sense of responsibility to meet the expectations of our customers.

  • The Group shall enhance its employees’ level of expertise and improve its training systems to train personnel with a strong sense of responsibility in regard to fulfilling the duties entrusted to it by customers, in order to thoroughly implement a customer-oriented approach.
  • (*)
    This declaration applies to the following Group companies: The Bank of Yokohama, The Higashi-Nippon Bank, and Hamagin Tokai Tokyo Securities.

Details of Group Initiatives

Each group company has established a department to supervise customer-oriented business operations and a risk management department. The supervising departments oversee overall customer-oriented business operations by formulating annual plans based on the Declaration and report regularly to the Management Committee etc., developing internal systems, reviewing and monitoring products and services, enhancing training, and conducting customer surveys. The risk management departments monitor customeroriented business operations from the perspective of customer protection, ensuring the suitability of product proposals and the provision of information, ensure the suitability and sufficiency of each function through periodic reports to the Board of Directors, and provide guidance for relevant departments. In addition, the Board of Directors of the Group supervises the efforts of each Group company.

In addition to complying with all applicable laws, regulations, and rules in the sale of financial products, we will solicit business appropriately in accordance with the solicitation policies set forth by each company and comply with relevant laws, ordinances, etc. concerning the protection of customers’ personal information and work in accordance with the policies set by the company.

In order to steadily implement customer-focused business operations based on the Declaration, the Bank of Yokohama Group has established an FD Promotion Committee at the Bank’s head office to evaluate and confirm the status of the implementation of fiduciary duties and to hold cross-organizational discussions and considerations regarding necessary responses and improvement measures.

Customer-Focused Support for Asset Formation and Management

The Bank of Yokohama has adopted a policy based on the Declaration and is working to conduct customer-focused business operations in order to realize true benefits for customers. In addition, we disclose indicators related to the results of customer- focused asset development and management proposals.

Furthermore, we have prepared an informative document entitled “Four Promises and Two Ideas” summarizing our approach to asset management based on the Declaration in an easy-to-understand manner and using it in asset management proposals and during follow-up.

The Bank of Yokohama is committed to realizing the true interests (best interests) of its customers, and proposes portfolios that contribute to medium-to long-term asset building that meet the true needs and interests of its customers. In making proposals to customers, we adopt a “goal-based approach” (*). We check the customer’s investment experience and knowledge, income, asset situation, and investment objectives, and carefully listen to their thoughts on their goals for their future life plan.

Using the “Wealth Advisor”, a portfolio analysis tool, and the “Money Plan Guidebook”, an information provision tool, we engage in dialogue with clients to support optimal asset building and asset management, including asset diversification and time diversification, in order to accurately meet the needs of each client in pursuit of their respective goals. During follow-up visits, we check to see if there have been any changes in their thinking or life plan. If so, we redefine the goals and continue to provide operational support to help them achieve their goals.

  • *
    This is a method of considering asset development in accordance with the future goals of each individual customer, and is based on the concept of setting an ultimate goal and working backwards from there to determine investment policy.
  • Four Promises

    For customers considering investment trusts
    Promise 1: To make customer-focused proposals for asset formation and management
    • We listen carefully to the customer’s ideas and propose a plan that contributes to medium-to long-term asset development and management based on the customer’s investment experience and knowledge, income, asset situation, investment objectives and other factors.
    Promise 2: To provide optimal investment products
    • We offer a wide variety of products to meet customer investment objectives and risk appetite.
    • We propose portfolios that provide stable asset management over the medium to long term.
    Promise 3: To provide customers with information and to give them highly satisfactory service
    • We stay close to our customers after purchase, and provide timely and appropriate information as needed.
    • We are committed to creating an environment in which customers can consult us with confidence.
    Promise 4: To work with financial professionalism
    • In order to provide optimal financial services, we develop human resources with a strong sense of responsibility to deserve the trust placed in us by our customers.
  • Two Ideas

    For customers with investment trusts
    Idea 1: (Approach 1) Invest slowly and carefully from a long-term perspective rather than attempting to guess the market.
    • We convey the importance of holding long-term.
    Idea 2: When in doubt, return to the two “starting points”.
    • If a customer becomes confused by market price fluctuation, we recommend that they return to the two starting points, namely the ‘purpose’ of their investment and the ‘term’ of the investment they were thinking about at the time of purchase.
    • Bank of Yokohama representatives are there for customers when the market is unstable and to help them in returning to the starting points of the investment.

Developing a Product Lineup in Line with Customer Needs

In selecting products, we take into account the economic environment and market trends. We offer a lineup of products to meet the needs of our customers, from among not only those handled by our group companies, but also from among those handled by a wide range of money-management firms and insurance companies. In addition, we monitor and check the quality of the products even after their introduction. Twice a year, we have a third-party evaluation organization*analyze their performance. If the results are not satisfactory, we consider stopping sale of the product.

  • (*)
    Examples of third-party evaluators
    Investment trusts: Nomura Fiduciary Research & Consulting, Inc. and Mitsubishi Asset Brains, Inc.
    Life Insurance: Investment Trust & Insurance Business Research Institute Co.

Provision of Information to Customers (Use of Important Information Sheets)

The Bank of Yokohama has introduced Important Information Sheets for both financial service providers and for individual products in order to provide customers with easy-to-understand important information on medium-to long-term asset development and asset management and in order to enable easy comparison of the following items.

  • Basic profits (returns), losses and other risks, as well as transaction conditions for financial products and services that we sell and recommend to customers
  • Attributes of potential customers of financial service providers involved in the development of financial products that we sell and recommend to customers
  • Reasons for the selection of the financial products and services that we sell and recommend to customers (including reasons for judging that they are based on customer needs and intentions)
  • If there is a potential conflict of interest with respect to financial products or services that we sell and recommend to customers, specific details of such conflict (including commissions received from third parties), and the impact of such conflict of interest on transactions or operations

The Important Information Sheets also provide a clear comparison of the level of fees for each product. We use the Important Information Sheets to provide easy-to-understand explanations of the investment products we handle across the board, while listening to the thoughts of our customers.

Taking a Stance Prioritizing Customer Satisfaction and Developing and Securing Human Resources

The Bank of Yokohama conducts an annual customer satisfaction survey to gauge customer satisfaction in order to seek the candid opinions of our customers. We ask our customers to evaluate our efforts directly and use the results to improve our products and services. We continue to improve our efforts to become the bank and staff of choice by offering proposals that contribute to long-term asset development and asset management and by providing regular follow-up services to give customers confidence after purchase (signing of contracts).

We conducted training, study sessions, and e-learning related to customer protection and compliance for all employees responsible for personal customers throughout the year to raise awareness. In addition, we are working to develop human resources with advanced expertise by encouraging staff to acquire qualifications related to customer protection etc. In particular, we are actively working to develop human resources with expertise and skills appropriate for financial professionals by encouraging them to acquire FP (financial planner) qualifications. In particular, we are working to increase the number of people obtaining FP Grade 1 and CFP qualifications, and the number of new qualification holders is increasing year by year, with 29 people in FY2022 and 49 people in FY2023.

The status of our efforts for customer-oriented business operations is reflected in the personnel evaluations of both management and staff members. We are working to raise awareness of customer-oriented business operations from the standpoint of personnel evaluations of both management and staff members.

External Evaluation of Customer-Oriented Initiatives

The Bank of Yokohama has been recognized for its efforts in selling customer-focused financial instruments, and in July 2024, the Bank received an “S+ rating” in the “R&I Customer-Focused Financial Sales Company Evaluation” published by Rating and Investment Information Inc. (R&I), which is a credit rating agency.

Key points of R&I’s evaluation of the Bank of Yokohama (excerpts from the evaluation report)

1. Formulation and publication of policies, etc. related to customer-focused business operations
Customer-focused business operations (Fiduciary Duty: FD) are positioned as a key management issue. To promote the penetration and establishment of FD, the Bank takes a flexible approach to solving issues at sales sites, particularly through dedicated departments and committees. In April 2024, a new FD Promotion Committee was established to strengthen Group-wide initiatives. A system has been set up that allows management to be more deeply involved in understanding the status of initiatives and considering solutions to issues. The FD initiative policy has been revised for easier understanding, including information about the collaboration with Hamagin Tokai Tokyo Securities. Moreover, detailed action plans continue to be established, and the PDCA cycle is being implemented.
2. Pursuit of customers’ best interests
Skill improvements are made with an accurate grasp of proposal skills of each sales representative according to their level of proficiency. The customers’ best interests are pursued through recent reviews of the human resource development system and the establishment of a structure that allows employees to efficiently master a diverse range of business operations. Establishment of FD awareness is verified through ongoing employee and customer surveys, and improvements are being made.
3. Sales policy formulation, sales, and review of financial instruments
Based on a goal-based approach that shares investment goals with customers, the balance of investment trusts and fund wraps is steadily being increased by proposing core-satellite strategies and periodic investments. In addition to lowering trust fees for funds included in fund wraps, the content of key information sheets has been revised to deepen customers’ understanding. A high level of after-sales follow-up with customers has been maintained. Collaboration with Hamagin Tokai Tokyo Securities within the Group is being strengthened, with bank and securities representatives working together to provide customers with the most suitable products.
4. Selection and monitoring of financial instruments
Based on rules established within the bank, the Bank follows a clear process for selecting investment trusts, insurance products, etc., conducts regular monitoring, and determines sales policies. Throughout this process, information from external evaluation organizations is utilized to improve the lineup of investment trusts and insurance products.
5. Appropriate motivational framework and other initiatives for employees
For performance awards targeting regions and districts, etc., evaluation criteria that correspond to the medium-term management plan have been adopted. In addition to incorporating FD items to lower the effective weight of revenue, an evaluation system has been introduced that brings greater awareness of FD on-site. Innovation can be seen in measures such as eliminating the revenue item in individual evaluations and instead incorporating the status of FD initiatives and the results of customer surveys into the evaluations.