The Bank of Tokyo-Mitsubishi UFJ 1.Enforcement of customer-first undertakings The Bank of Tokyo-Mitsubishi UFJ (BTMU) seeks to enforce, through training etc., judgment and behaviors among its employees based on the Principles of Ethics and Conduct and the MUFG Basic Policy for Fiduciary Duties. In addition, we will strive to improve customer satisfaction by gathering feedback from customers and implementing various measures based on their views in order to achieve the greatest benefits for customers. 3. Implementing customer-first consulting and provision of information (1) Implementing customer-first consulting and provision of information In proposing products, BTMU selects products based on customers knowledge, experience, financial circumstances and transaction purposes. It strives to propose products that match customers needs based on their life stages and attributes. Particularly with elderly customers and customers with limited investment knowledge and experience it seeks to propose products with low risk. BTMU will provide timely and adequate follow-up services including providing customers with a market outlook, status of investments and other information needed for their investment judgment in such events where the market fluctuates significantly. (2) Providing detailed information tailored to customers level of understanding In proposing products, BTMU strives to explain the products characteristics, risks and fees as well as market trends with easy-to-understand expressions and important information highlighted by such means as larger text and coloring and thereby to provide necessary and sufficient information. Moreover, BTMU utilizes tablet terminals and other devices to provide its customers with easy-to-understand information explaining returns, losses and other risks, transaction terms and conditions with simulations, graphic charts and other tools. In proposing products, BTMU seeks to make even better proposals through dialogues with its customers including presenting model portfolios and performance simulations on tablet terminals and other devices based on asking questions about their investment intensions. BTMU has built a system where products involving complexity or high risks are explained even more carefully including only by highly-skilled personnel in charge. On the other hand, BTMU applies a simple procedure to the sale of JGBs with limited risks to individual investors, including providing concise information. (3) Improvement of transparency of fees so as to contribute to customers investment judgment BTMU will seek to enhance transparency of fees for each product and provide in-depth explanations so as to contribute to customers investment judgment. In addition, regarding fees on insurance sales, we have since October been disclosing handling fees for specified insurance contracts. (4) Developing a performance evaluation system that reflects customer-first undertakings BTMU has introduced a performance evaluation system comprehensively evaluating sales activities that contribute to customers benefits and needs without placing an excessive emphasis 1
on the sales of certain investment products. Furthermore, it will develop a system to pursue its customers best interest from a long-term perspective, including introducing a longer performance evaluation period and a performance evaluation system that assesses such factors as expanded customer base and continuously accumulated deposit balance in a well-balanced manner. (5) Initiatives of investment education BTMU provides information when necessary including presenting investment awareness raising brochures to its customers and regularly holding seminars for customers. 4.Provision of line of products to meet diverse needs (1) Provision of line of products to meet diverse needs BTMU will offer a diverse and high quality line of products that enables customers to select appropriate products according to their investment objectives and risk tolerances. We will offer a product lineup including products with low risks or low fees so as to allow as many customers as possible including those with little investment experiences to utilize its services. It also seeks to improve convenience in the utilization of online transactions and periodic investment plans and thereby to allow customers of broad age groups to use its services. (2) Selection of products that contribute to customers asset building and provision of sales procedures BTMU will select products and services that contribute to customers benefits from among many product designs proposed by a variety of investment management firms, insurance companies etc. while utilizing evaluations by external assessment agencies where necessary. When selecting and selling products we strive to implement the following undertakings not to give priority to the products of our business affiliated companies and not to recommend only products that generate high fees on sales. At the time of selecting products The products we handle are selected from among the same types of products taking into account the selection points noted below. < Selection points > 1 2 3 4 5 6 7 Risks of products Expenses Performance The needs of the anticipated sales customers, appropriateness, and compatibility with the investment environment The complexity of the product structure, the level of difficulty in explaining products, and sales channels Structures for training and support for the executives and employees of sales companies by investment management firms Conformity with related laws and regulations Consideration might result in selecting a product offered by our business affiliated companies. 2
At the time of sale We do not provide excessive incentives for handling products of our business affiliated companies in order to ensure that we propose to customers optimal products for their needs. In addition, in our performance evaluations of sales staff we do not give preference to sales of products of our business affiliated companies over those of non-business affiliated companies. Furthermore, the second line of defense, in order to maintain appropriate proposals activities for customers, undertakes periodic inspections to ensure that preference is not given to sales of products that generate high fees. 7.Provision of financial services leveraging the Group s consolidates strength BTMU strives to leverage the consolidated strength of Group companies including Mitsubishi UFJ Trust & Banking and Mitsubishi UFJ Morgan Stanley Securities to meet customers diverse needs-, and to make proposals based on the act of constantly confirming customers intentions to satisfy their changing needs. BTMU makes comprehensive proposals not only on investment products but on lending and support for inheritance and succession according to customers life cycles and needs. 8.Establishment of a structure enabling comfortable, secure and safe transactions BTMU seeks to improve customers convenience based on the notion of open innovation by proactively utilizing technologies and ideas that it acquires from Japan and other countries in cooperation with external companies and research institutions, including the introduction of new additional services and functions provided through digital channels. BTMU strives to further improve customers convenience as well as its proposals by utilizing tablet terminals and other devices for simplified procedure and accelerated responses. BTMU, day by day, improves the security of its online banking system to enable customers to complete transactions through the internet with a sense of security. 9.Exertion of professionalism BTMU seeks to strengthen its staff s knowledge and skills in relation to products and investment environment including providing them with training and encouraging them to obtain external specialized qualifications and thereby to enhance their expertise as professionals. Furthermore, it seeks to improve quality of its directors and employees by, in the case of those who visit individual customers, encouraging them to obtain financial planner (FP) and other external qualifications and to enhance their knowledge and skills relating to products and investment environment by providing them with diverse forms of training according to their experience and organizational positions. 3
Level-premium insurance Single premium [Implementation status] BTMU will regularly disclose the degree of adoption of customer-first undertakings including its initiatives for further improvement of products and services while reviewing its initiatives as needed. Initiatives for improvement of quality of its directors and employees and for investment education; FP qualification acquisition rates among its staff remain high. BTMU is thus enhancing their expertise as professionals. BTMU holds over 600 seminars for its customers per year, striving to provide them with various information. Fig.1 FP2-level qualification 1 acquisition rate Fig.2 Number of seminars held for customers 2 100% 95% 90% 85% 80% June Oct. Mar.2017 Management Sales Representative 1. FP2-level qualification: 2nd grade certification as Certified Skilled Worker of Financial Planning and/or AFP qualification 450 400 350 300 250 200 1H 2H 1H 2H 1H 2H (For 5 months) 2. Aggregated number of seminars for customers held Enhancing product lineup; BTMU strives to enhance its product lineup to meet diverse customer needs. Out of the 235 investment trust funds that BTMU deals with most recently (as of March 2017), 37 are no-load funds. Though the continuously low interest rates caused suspension of the sale of some life insurance products, mainly yen-denominated ones, BTMU continues to strive to maintain and enhance its product lineup to meet diverse customer needs. Fig.3 Investment trust fund lineup (End-Mar. 2017) 3 Fig.4 Life insurance product lineup (End-Mar. 2017) Category No.of products Ratio of products Domestic bonds 4 2% Domestic stock 30 13% Foreign bonds 85 36% Developed nations 55 23% High yield 13 6% Developing nations 17 7% Foreign stock 50 21% Developed nations 38 16% Developing nations 12 5% REIT 31 13% Balance type 33 14% Other 2 1% Total 235 100% No-load products 37 16% 3. Sum of investment trust funds sold over the counter (including funds sold only through online banking service), and investment trust funds through financial instrument intermediary accounts; Only open-end investment trust funds (excluding foreign investment trust funds and unit-type investment trust funds); A currency selection-type fund is counted as one with its different classes combined Product type No. of products Ratio of products Yen-denominated 4 21% Investment-type pension 1 5% Fixed annuity pension 0 0% Whole life 3 16% Nursing care and Medical 0 0% Denominated in foreign currencies 15 79% Investment-type pension 3 16% Fixed annuity pension 4 21% Whole life 8 42% Total 19 100% Product type Whole life Term Medical and Cancer treatment Educational endowment Pension and Endowment Nursing care Total No. of products Ratio of products 7 28% 2 8% 11 44% 0 0% 3 12% 2 8% 25 100% Products for which handling 20 45% fees are indicated 4 4. Disclosure of fees for specified insurance policies started in Oct. 4
Customer satisfaction Implementing customer-first consulting and provision of information; The amount of account transfers for periodic investment trust fund purchases is increasing every fiscal year. The actual amount transferred in the 2H of FY increased 118% from the 1H of FY. BTMU will continue to contribute to its customers steady asset building. Fig.5 Amount of account transfers for periodic investment trust fund purchases (JPY, 00 mil.) 5 60 50 40 218% 240% 200% 160% 30 20 10 0 100% 1H 2H 1H 2H 1H 2H 120% 80% 40% 0% 5. Sum of the fixed-day, fixed-amount withdrawals for investment trust fund purchases Responding to customers evaluation and feedback; To improve its services based on customer feedback, BTMU regularly conducts customer satisfaction surveys to directly obtain customer feedback, which indicates a high level of satisfaction on a comprehensive basis and improved satisfaction in consulting functions (for asset management, life planning and loans). Still, degrees of satisfaction vary by aspect of customer services. BTMU seeks to improve customer satisfaction and thereby to meet customer expectation. The number of cases where improvement was made based on customer feedback is steadily increasing every year on a cumulative basis. Fig.6 Satisfaction survey 6 Fig.7 Degree of emphasis on and satisfaction in aspects of services by personnel in charge of customer visits 6 100% 80% 60% 73% 80.0 Accuracy in clerical procedures 40% 20% 54% FY2012 FY2013 FY FY FY Comprehensive satisfaction Degree of satisfaction in consulting functions Fig.8 Number of cases of improvement based on customer feedback 7 600 400 120 80 75.0 70.0 65.0 60.0 68.8 Employee attitude of politeness toward customers Employee appearanc Employee approachability Product knowledge Prompt response to customers inquires Understanding of customers requests Clear information and explanation 200 0 FY2012 FY2013 FY FY FY Number of complaints resolved Total amount of complaints resolved Number of complaints (Right axis) 40 0 6. [Fig. 6 and 7] Survey outline and subject customers: Randomly selected individual customers (Questionnaires postal-mailed to approx. 8,000 customers and responded by approx. 2,000). / Comprehensive satisfaction: The ratio of responses indicating satisfactory or fairly satisfactory on a comprehensive basis regarding various transactions with BTMU. / Degree of satisfaction in consulting functions: The ratios of responses indicating satisfactory or fairly satisfactory with respect to consulting about and transactions of asset management, life planning and loans.; 7. [Fig. 8] Number of complaints: Indexed with FY2012 s value as 100 5 Ability to make proposals 44.8 55.0 35.0 40.0 45.0 50.0 Importance to customers
Enforcing customer-first undertakings (Track records); Assets under management is growing reflecting improved market values and increasing deposited assets of customers who have newly purchased investment products. The number of investment products holders is increasing gradually but continuously. Fig.9 Changes in assets under management and the number of investment products holders 8 (Trillion Yen) 10.5 Assets under management Number of investment products holders (Ten thousand people) 110.0 9.5 105.0 8.5 100.0 7.5 95.0 6.5 June Sept. Dec. Mar. June Sept. Dec. Mar. June Sept. Dec. Mar. 2017 90.0 Nikkei225 Index (Last price) 15,162 16,174 17,451 19,207 20,236 17,388 19,034 16,759 15,576 16,450 19,114 18,909 8. Actual transactions with individual customers; on a managerial accounting basis 6