Medium-term Management Plan
New management plan
April 2022 sees the start of our new medium-term management plan titled “Beyond Our Limits.” The plan sets out a vision specifying what kind of organization we want to be: a comprehensive financial group with admiration and respect. Toward this vision, we hold up the principle of the plan, “Social Value & Justice comes first”. We, at the same time, set the New World beyond our limits as our destination as we execute the plan.
Principle of the plan
Our will is embedded in the principle of the plan, “Social Value & Justice comes first”, that our every single action should be based on the pursuit of the “Social Value & Justice”.
The “Social Value & Justice” represents the ideals that Tokai Tokyo Financial Group has long nurtured, including behavior. “For a better society”, “Perfection in fulfilling all the mundane basics” and “Be exciting”.
To be more specific, themes we hear in daily lives such as SDGs, Fiducial Duty, Compliance and Anti-Harassment are included in the concept of the “Social Value & Justice”. Furthermore, we think of the meaning of the “Social Value & Justice” as not static but variable. It will change along with changes in our society as attested by the idea of “carbon neutral”, which recently has come to attract attention.
We set the phrase, “comes first” behind “Social Value & Justice”. The reason is that the “Social Value & Justice” is not our goal but the underlying principle of the management plan. This means that the “Social Value & Justice” is the first prerequisite we should mind before we take any action toward the plan execution.
Breaking-through to a New World beyond our limits
We named our destination of the plan as a New World beyond our limits, meaning the spot we are not able to reach yet.
For us to reach the New World beyond our limits, we will base our endeavors on alliance strategy that we have fostered for 15 years.
Up until now, we have been able to establish and enjoy mutually a win-win relationship with various alliance partners. The key attribute to success is the combination of our securities brokerage competence and the partners’ customer bases and operating resources. We will further expand this formula.
It is true that the limits we confront tower high and impede our forward movement. But, we will overcome the barrier by working together with Powerful Partners institutions in the sectors such as energy companies, telecommunication companies, financial institutions, real estate companies, universities, regional banks, and local public government. We will tear down the limits and reach new and untapped territories, the New World beyond our limits, by gaining access to the said partners’ customer bases, subscription memberships, and expertise.
In order for us to make the said wish come true, we must develop and refine what we call a New Bonanza, which is composed of new services and products that generate revenues like new gold mines do. This is the way how we will raise the value of both the Tokai Tokyo Financial Group and various joint operations for the sake of the Powerful Partners as well as ourselves.
Having said so, we do not suggest at all slowing down the steps in our primary business of securities brokerage per se. In the conventional area of our business, we aim to become a truly appealing corporate group by improving the quality of our operation up to a higher level, which is, what we internally refer to as, the “Next Stage”. Then, we form alliances with the Powerful Partners to achieve a further leap. Bearing this goal in our mind, every one of us in the Group shall do our best in fulfilling our respective duties.
For the next 5 years from April 2022, while observing the “Social Value & Justice”, as our starting point of action, we aim to reach the New World by driving forward our operation allying with the top-class corporation as partners. As such, we will carry out a strategy of our own, which is Tokai Tokyo’s hallmark business approach.
The basic policy of strategy formation
The management plan with a view to reaching the New World consists of two pillars and they are 1) the basic policy of strategy formation and 2) the key measures to be focused on.
The first task to be undertaken is the caliber enlargement as a financial service provider.
Reaching the destination, the New World beyond our limits, is easier said than done. We must at first solidly secure our foothold for performing core daily operations. Next, in order to build an alliance with Powerful Partners, we need to be fitted with new attractive financial services and products.
Further, we work on key measures to reach the New World. Taking advantage of the enhanced caliber of service and product delivery competence, we will make the most of New Bonanza resources mutually with the Powerful Partners in implementing the measures markedly advanced from all those Tokai Tokyo have once dealt with.
The caliber enlargement as a financial service provider
The caliber enlargement as a financial service provider, we believe, would be attained by meeting the following four requirements. They include; 1) creating new markets, 2) establishing a stable earning structure, 3) elevating the operation of the group subsidiaries up to a self-supportive level by selling their respective services to outside users in addition to the group companies, and finally, 4) grappling with the second productivity revolution.
1) Creating new markets
Just like we started the operation of the STO Center, we will aggressively move into new growing markets and deliver new products, and develop continuous product supply capability by designing a reliable trading model for the division responsible for product delivery. We create new markets by implementing these three interconnecting measures.
2) Establishing stable earning structure
We, as a group, will establish stable earning structure by accelerating diversification of business portfolio and revenue generating sources. Our such endeavors include securing stable revenue sources such as banking and asset management operations that are relatively insulated from market fluctuations.
3) Elevating the operation of the group subsidiaries up to self-supportive level
Tokai Tokyo Financial Group retains many subsidiaries and affiliates as its members besides Tokai Tokyo Securities, the core operating body. Our idea is to have those group companies identify and acquire the clients outside the group as new revenue sources. Further, we even prepare such companies for going public through IPO eventually. We consider that this process should implant an ambition in the minds of all the people working there and incentivize them to work actively.
4) Grappling with the Second Productivity Revolution
The Second Productivity Revolution follows the first one pursued under the preceding management plan. The second one further advances the drive in progress while setting clear targets such as DX and shared service so that the continuing revolution moves up to the next level.
Measures for us to reach the New World
There are 4 (four) key measures for us to reach the New World and they are 1) Financial Platform, 2) Green Inclusion, 3) Tokai Tokyo Digital New World and 4) Regional Support Program.
1) Financial Platform
We will provide our enhanced financial functions to the expanded range of financial and non-financial institutions in addition to our existing partner regional banks.
2) Green Inclusion
We will offer the resources for solving the issues widely talked about in the society like the green, environmental and resource preservation. The word, inclusion, in the context of Japanese value, means “accept and embrace” without excluding any body from joining the GREEN solution process. ESG investment that was made accessible by security token for a broad range of small-lot investors is a good example to understand how a financial tool can help this concept, Green Inclusion, work for problem-solving in our society.
3) Tokai Tokyo Digital New World
We have worked on “Tokai Tokyo Digital World”, one of the Fourfold Future Strategy elements. Now, we re-named it as “Tokai Tokyo Digital New World”, hoping to raise the quality of the current version one layer up.
4) Regional Support Program
Further, we will advance the regional support program, another future strategy element, developing businesses that can facilitate our contribution to regional revitalization through collaboration with regional bank partners with whom we have fostered good relationships. These efforts will be actually made in the form of satisfying the digitalization needs felt by local municipalities, businesses and residents. We must address such needs by dealing with regional currencies, digital coupons and others, to be issued for promoting regional commerce.
Strengthening the company structure
Enhanced company structure is also essential to aspiring for reaching the New World. We must lay down a firm organizational structure that is supported by sound corporate culture, governance, risk management & compliance, and IT and data processing system.
Organization & Corporate Culture
As previously mentioned under “The caliber enlargement as a financial service provider, 3) Elevating the operation of the group subsidiaries up to self-supportive level”, we aim to design a spin-out strategy to change the culture of our organization so that it encourages employees of respective group companies to work actively with ambition rather than passively without any hope. We envision that some group companies go for IPO in the end. Further, with respect to corporate culture, we hope to convert our group atmosphere in which the words, “Social Value & Justice” come out spontaneously from the mouths of employees.
Governance
While we maintain consistency in administrating governance for the entire Tokai Tokyo Financial Group, we at the same time respect the efforts made by each group company to become self-supportive. We consider it important to keep an optimal balance between the autonomy of subsidiaries and the coherence of the group.
Corporate GovernanceRisk Management & Compliance
Besides guarding against geopolitical risk and market risk, we will properly manage the risk that may arise from the operation we newly undertake in striving toward the New World beyond our limits.
Compliance and risk managementIT and data processing system
We will keep an eye on the system renewal investment from the standpoint of its proper life cycle. Further, we actively hire highly-skilled IT professionals who are instrumental to our advance to the New World beyond our limits.
Human resources strategy
We, the group, attach great importance to human resources strategy for reaching the New World beyond our limits, and we make the following approaches concerning each requirement.
1) Assignment
The first step to meet this requirement should be to squeeze out surplus human capital by advancing the Second Productivity Revolution and optimizing the balance of personnel allocation between existing operations and newly emerging ones or between divisions directly engaged in revenue generation and those not.
2) Hiring
We consider it important to acquire the expertise the group does not possess. So, we place an emphasis on hiring persons well versed in new operating fields.
3) Training
We were committed to the employees’ training during the years of the previous management plan, and we stay focused on enhancing in-house employee training. In addition, we expect the mid-career staff to transfer their knowledge and insight to the peers who joined us directly from schools, stimulating the entire group. Also, we continue to encourage employees to seek learning opportunities outside the group such as allowing scholarships to MBA-bound employees.
We arrange our working environment so that it becomes both worthwhile and easy to work, and ultimately commands admiration from outside.
1) Worthwhileness to work
To make the group worthwhile to work with full devotion, we will raise the level of employees’ engagement. For this purpose, we will make the remuneration to the level expressive enough to appreciate employees’ contribution and make them feel proud of being a part of the group.
2) The place they feel easy to work
We make the group where the employees feel easy to work at. Toward this end, we will set up the working environment for diverse employees can fully devote their energies to their duties and ambitious ascent of respective career-ladders, and self-realizations.
Sustainability