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Smartplus's Innovative Step Towards Cybersecurity in Finance

In a significant move aimed at enhancing online security in financial transactions, Smartplus, a subsidiary of the Finatext Group, announced the introduction of an industry-first passkey authentication feature for its Brokerage as a Service (BaaS) platform, effective August 6, 2025. This novel function is expected to mitigate the rising threat of cyber attacks, including phishing incidents that have increasingly targeted securities accounts.

Background and Purpose

Recent years have seen a notable escalation in unauthorized access attempts to securities accounts. Traditional authentication methods have proven insufficient against sophisticated phishing schemes and password list attacks. Regulatory bodies, including Japan's Financial Services Agency and the Japan Securities Dealers Association, have strongly advocated for enhanced online transaction security protocols.

In response, Smartplus will implement a passkey authentication system compliant with FIDO Alliance standards in its BaaS platform. This cutting-edge technology not only provides robust resistance against phishing attacks but also offers users a more convenient alternative to traditional password inputs.

The BaaS platform operates as a SaaS (Software as a Service) solution, enabling swift adaptations to regulatory and environmental changes. Importantly, participating partner firms can access the passkey feature at no additional cost.

Launch Partners and Services

Initially, the passkey authentication functionality will be rolled out with several partner firms, including Mitsubishi UFJ Asset Management’s “mattoco+” service. As the platform enhances its capabilities, Smartplus aims for wider integration across its partner services by September 2025.

Anticipated Benefits of Passkey Authentication

For Customers

1. Improved Security:
- Multi-Factor Authentication: Enables two-factor verification without needing additional authentication tools.
- Phishing Resistance: Incorporates technology that safeguards authentication details from potential phishing sites.
- Guaranteed Authentication Strength: Ensures a consistent level of security without relying on user-defined password complexities.

2. Enhanced Convenience:
- Simplified Login: Users can access their accounts using biometrics like fingerprint or facial recognition instantly.
- Reduced Password Management Burden: Less effort needed for complex password creation and maintenance.
- Multi-Device Compatibility: Users can easily synchronize their passkeys across multiple devices.

For Partner Firms

1. Cost Advantages:
- No Additional Costs: Seamless implementation without extra development expenses due to the automatic update feature of the SaaS system.
- Reduced Operation and Maintenance Costs: Smartplus manages the technical upkeep related to passkey systems, easing the operational burden on partner firms.
- Efficient Security Investments: Eliminates the need for building individual security systems, maximizing resource allocation.

2. Competitive Edge:
- Differentiation through Innovation: Offering advanced security technology ahead of competitors will set them apart in the market.
- Enhanced Customer Satisfaction: Improved user experiences relating to security will elevate customer trust and loyalty.
- Increased Brand Value: A commitment to innovative security measures bolsters overall brand credibility.

Future Plans

Smartplus is dedicated to continuously enhancing its security protocols. In April, the company integrated a public personal identification service utilizing My Number Cards, reinforcing multi-layered security strategies alongside the new passkey feature. Future enhancements will focus on merging the latest security technologies, adhering to industry standards, and responding promptly to regulatory changes.

About BaaS

BaaS is an API-based platform that provides a comprehensive suite of operational systems essential for delivering securities services. This cloud-managed solution separates front-end systems from middle and back-end systems, allowing for rapid service development tailored to client requests while flexibly adapting to changes in regulatory and environmental contexts. By adopting BaaS, firms can quickly launch high-value services with lower costs.

Core Functions of BaaS

• - Essential Features: Execution of trades, deposit and withdrawal capabilities, tax-related services, shareholder administration, account opening, and management.
• - Optional Features: Including credit card withdrawals, point investment, robo-advisor functionalities, among others.

Smartplus continues to lead the fintech sector in Japan by prioritizing user-centric financial services that adapt to changing market demands and technological advancements.