At Monex Group Inc. (the “Company”), our corporate philosophy is: “With state-of-the-art information technology, globally universal values and a sense of professionalism, Monex Group designs innovative ways of managing money and realizing individual self-fulfillment for an ever-changing future. Our ultimate goal is to optimize each person’s lifetime balance sheet.”
To realize this corporate philosophy, we believe that innovation is essential. The Company and its group companies (collectively, the “Group”) have succeeded in securing corporate growth through innovation. Innovation at the Group has four characteristics – having foresight, taking risks, increasing value, and corporate culture – and with these characteristics, we have been forging growth in an ever-changing future.
As evident in the M&A of Coincheck and TradeStation, the Group’s business investments start with the defining of a vision.
In 1999 at the dawn of the Internet, Monex was established as an online brokerage company with the foresight that financial services would become available online. Our vision was to constantly innovate in anticipation of changes in society and technology.
For example, with the growing popularity of smartphones and the Internet for business transactions and with the world becoming increasingly borderless, we foresaw that financial products and services would become more global. In 2011, we formulated our “Global Vision” in recognition that global online brokerage operations and interconnectivity would be key to our growth. In 2017, we announced that we would embark on our “New Beginning” with the belief that blockchain technology and crypto assets would radically transform the capital markets.
Currently, with a digital transformation amidst the COVID-19 pandemic, individual lifestyles and ways of life are becoming more diverse. In response, we updated our corporate philosophy to include, “to realize individual self-fulfillment and optimize each person’s lifetime balance sheet” in April 2021.
Our vision was created using an inductive approach where we analyzed and discussed what type of company we want to be based on a detailed understanding of global finance and other circumstances. In addition to responding to current changes in our operating environment, we believe this approach can be replicated in the future to accommodate transformations in societal structures, the globalization of our business operations, and the diversification of human resources and people’s lifestyles.
Viling Inc., which provides STEAM education for individual self-realization, and Selan Inc., which offers high-quality English-language education taught by bilingual teachers, joined the Group in November 2021 and November 2022, respectively. Both initiatives embody the transformation of our business model with the revision of our corporate philosophy. With ongoing expansion of our business domains, we believe we will gain a wider depth and breadth of information and perspectives, which will further enhance the replicability of our approaches to secure our future.
Defining and executing a vision requires the ability to take bold risks with an appropriate level of risk control. Our Group has been able to achieve dramatic growth through active risk taking and appropriate risk control of initiatives that bear fruit in the future. For example, with the acquisition of TradeStation under our “Global Vision” (detailed in the chapter, “Increasing Value”) and the acquisition of Coincheck under our “New Beginning,” these two companies have become pillars of our Group’s operations.
Bold risk taking requires a quantitative and appropriate assessment of risk. First, we determine underlying risks and how they can be controlled. Based on this analysis, we then decide whether to engage in this new business to realize our new vision.
Our past M&As and business expansions reflect a history of bold risk taking balanced by appropriate risk control, both necessary for business growth. In addition, when considering M&As, we must do so within a limited amount of time.
When Coincheck first joined our Group in April 2018, our board of directors was able to make this urgent and important decision in a very short period. This was due to their increased understanding of the crypto asset business with the consideration to enter this new field, as outlined in the October 2017 announcement of our “New Beginning.” In addition, we included an earn-out clause in the share transfer agreement with the existing shareholders of Coincheck to control risk. With the future of the crypto asset industry being uncertain, we felt that an earn-out clause was the best risk control measure we could take to ensure that the acquisition price of Coincheck’s shares would be at fair value.
After formulating a vision and taking appropriate risks, we need to reap the benefits by increasing value.
The Group top management works closely with the leadership teams of each of the Group companies to create an effective management structure. By strengthening its management structure and rebuilding its brand, the TradeStation Group increased its assets under custody approximately five times and its operating revenues 1.5 times in the 10 years it has been a Group company. Currently, it has grown to become a pillar of the Group’s business. In addition, Coincheck was able to register as a crypto asset exchange after implementing enhanced security and internal control measures to prevent unauthorized withdrawals of crypto assets. In the three years since joining the Group, Coincheck’s number of accounts doubled, its assets under custody tripled, and its operating revenues increased by 14-fold, all while achieving significant reductions in fixed costs through effective cost-control measures in line with its scale of revenues. Both TradeStation and Coincheck have contributed to increasing corporate value of the Group.
Increasing value means more than generating short-term profit. It also means building a business foundation centered on the long-term enhancement of corporate value. The companies that have joined the Group through M&As and other means are all indispensable for realizing our corporate philosophy. We respect the unique qualities and corporate cultures of each of these Group companies to ensure that their strengths remain intact.
For example, TradeStation in the US has a different business character than Monex, Inc., in Japan. It serves an active trader base and provides a distinct platform that appeals to them. Since joining the Group, TradeStation has evolved its business model to meet the needs of the US online brokerage operating environment. We believe their mid- to long-term increase in value contributes to the increase in corporate value for the entire Group. That is why TradeStation continues to be managed by US executives who work to fulfill the vision they have set out themselves.
With Coincheck, the Group entered the crypto asset trading business as a new area of operations. Coincheck has built a younger customer base compared to the financial instruments trading business, and this has led to their increased value.
This long-term approach to increasing value and post-merger integration takes time to realize profits and our vision, but we believe that allowing each Group company to operate independently creates profit and corporate value and secures a diversified business portfolio that is resilient to changes in the operating environment.
With its proprietary technologies, the Group has expanded its businesses globally in areas under regulatory control, namely as a financial instruments firm and a crypto asset exchange with customer assets in custody, and in new growth areas, such as the Internet, blockchain, and the metaverse.
As a result, we have had a diverse mix of values and cultures within the Group ever since our establishment. We believe this diversity is the source of our corporate growth, and to further embrace this important quality, we are accelerating our efforts in Diversity, Equity, and Inclusion (DEI).
For example, Monex, Inc., which is a financial instruments business operator in Japan, expanded its operations through M&As of Saison Securities, Nikko Beans, Orix Securities, and other Japanese online brokerage firms. Employees of those acquired companies who joined the Group have been actively promoted to management positions, regardless of company of origin or age. In addition, to realize diverse workstyles for a diverse group of employees, we have created a salary structure with no gender gap and an environment characterized by mutual respect and work based on ability. By promoting autonomy, fairness, and the embodiment of our corporate philosophy, we are working to instill a corporate culture that respects DEI.
This corporate culture, with its emphasis on diversity, forms the foundation of our approach to formulating a vision. We consider a wide range of perspectives and respect the unique qualities and corporate cultures of each of the individual subsidiaries to increase value. It is a key element that drives innovation at the Group.