Innovating on Safer Banking – Dr. Haruhiko Fujii

Dr. Haruhiko Fujii is the CEO and CTO of BankGuard, a startup registered in Singapore that provides security solutions that address weaknesses of current technologies. He shares how Thomas Edison inspires him to invent innovative security solutions to make online banking and financial transactions safer.

Tell me a little bit about yourself.

I have a PhD in Engineering and a patented inventor of a new method of Two-Factor-Authentication. I worked for NTT Laboratory as a researcher and is a part-time lecturer at the University of Electro Communications in Tokyo.

I was awarded 2013 Telecommunication System Technology Prize, supported by the Japanese Ministry of Internal Affairs and Communications, and the 2017 Inventor Prize, supported by Japan Patent Office.

The most recent award was the Innovation Award, which was awarded by Nikkan Kogyo Shimbun, a Japanese economic newspaper, and supported by the Japanese Ministry of Economy, Trade and Industry, Japanese Ministry of Education, Culture, Sports, Science, and Technology, Japanese Patent Office, Japanese Small and Medium Enterprise Agency, Tokyo Metropolitan Government, and Japan Chamber of Commerce and Industry. In the past, some of the recipients of the Innovation Award were also awarded Medals of Honor.

What is your business venture about?

Bankguard is essentially a cyber security solution, which provides both authentication and secured payment for banks and financial institutions.

To achieve that, we have developed the following technologies:
a. SuperMatrix – A patented 2 Factor Authentication (2FA) for internet banking and financial transactions.
b. SuperMoney – A biometric palm authentication technology that enables secured real time money settlement.

What is your mission at the outset?

My mission is to bring cost-effective cyber security solutions that bridge the gap that current security technology faces. Cyber security threats is very real in the world right now, and has caused billions of dollars loss world-wide due to fraud and hacking. I am extremely cognizant of this fact, and based on my past research and experiences in security, hope to bring a new line of defence against such threats.

How did you get your idea or concept for the business?

When I was at NTT Laboratories, I was in charge of the development of security technology for internet banking and mobile -based money settlement. With good success in research and experimentation, I have been having strong desires to create effective technology to meet benchmarks for security, cost economy and convenience.

What is unique about your business?

Bankguard solutions and business is based on unique and patented solutions not found elsewhere. In addition, the solutions had been designed to be cost effective i.e. at a lower price than any prevailing security solutions.

SuperMatrix protects any kind of cyber attacks by printed chart of random images. It does not need to be replaced regularly due to battery run-out or breakdown. It is also much safer than SMS authentication (Two-Factor-Authentication) . In addition, it works for any user, in any area, and for any device. It has been implemented by the internet banking systems of 270  small financial institutions inn Japen. Patent is already registered in Japan (Patent No. 6005890) and we are now applying international patent as well (PCT/JP2015/062704).

SuperMoney is the world’s first card-less and reader-less debit system. Once the customers put their palms on the store’s smart phone, the users are authenticated and money settlements are immediately processed on real time basis. 6 Japanese regional banks, including Chiba Bank, are now doing testing this technology. We are now applying international patent (PCT/JP2015/062704).

Who do you sell to and how do you get customers? 

Bankguard has both direct and indirect channels of business development and sales. Direct channel is where Bankguard will approach the banks and financial institutes where Bankguard already has direct relationship, especially in Japan. Indirect channel will be working through both domestic and global partners (especially for global markets) where Bankguard does not have a presence nor the direct relationship with the customer.

Why will customers stay or do repeat business with you?

The business model offered by Bankguard is subscription-based and low cost. It is also an  evolving technology, this will ensure stickiness with customers when they realise that Bankguard’s technology is future-proof and their needs are met over the long term.

Moreover, the individual products have long staying features:

1) This technology is not available except from BankGuard because it is protected by patent.
2) Being printed, it cannot be replaced easily once delivered in Japan. The soft token version is available on mobile phones and is easily deployed with low costs.
3) Fees are paid on annual basis.
4) As long as cyber attacks happen, serious needs for internet banking protection keep expanding.

1) It is the most cost efficient technology among others since it does not need IC card nor its reader. The customers do not need even their own smart phones, and therefore all the people can use it.
2) It does not need credit cost since it is debited on real time basis.

What have been the biggest obstacles?

The biggest obstacle, especially outside of Japan, is to have banks and financial institutions understand the weakness of prevailing 2FA solutions like OTP solutions. This is also because they have invested heavily in the current technologies and hence reluctant to explore better solutions. Competitions of Bankguard SuperMatrix would be solutions like RSA and Vasco, where due to branding world wide, been rather difficult to replace.

As for SuperMoney, in the areas of secured money transfer, there is competition from popular money transfer methods for example Facebook money transfer, which have a global audience.

If you had one piece of advice to someone just starting out, what would it be?

Make the product design as perfect as possible. Conduct thorough competitor research and keeping ahead of competitors are crucial. Don’t get funds from outside parties until getting your first few clients to show product-market fit. Survive with small team to conserve resources.

Do you have any final thoughts?

Companies should never have security as an afterthought. Through recent security incidences, it has been proven that the damages caused by security breach can severely damage a company, both financially and reputation-wise.

In the current world of FinTech, I believe security is often overlooked in the name of new and exciting innovations in the various thematic areas of FinTech. However, all it takes is one major security incident and it can cripple the ecosystem and undo all the collaboration between the FinTech companies and the financial institutions.

Who is your biggest inspiration or drive to do what you are doing?

My biggest inspiration will be Thomas Edison. Based on his life story and his inventions, he has ignited the spirit of invention in me, and I would like to achieve similar feats of innovation in my life.

What’s next for you and for Bankguard?

A recently article in the Japan Economic Journal has selected BankGuard as one of the most innovative FinTech companies in Japan.

Bankguard would really like to work on global expansion plans and at the same time create new solutions that meet the current security threats faced globally.

For SuperMatrix, I would like to expand it globally. We need somebody to work with us to propose this technology to global mega banks and major credit card companies.

For SuperMoney, I would like to make the verification test with the 6 Japanese banks successful.

Chia Hock Lai

Chia Hock Lai

Chia Hock Lai is passionate about how technology is disrupting the way financial services are being delivered to consumers and businesses, and in the process making the financial system more efficient and inclusive.

Hock Lai has 18 years of experience in the financial industry, having performed roles in both business and technology. He graduated from the National University of Singapore (Real Estate), Nanyang Technological University (Infocomm Technology) and Nanyang Polytechnic (Fund Management & Administration).

He is also a Fellow of the Singapore University of Social Science, advisor to FinTech Startups and mentor to student FinTech projects.
Chia Hock Lai
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