Digital StrategyFebruary 19, 2019Mitsubishi UFJ Financial Group Inc.

This document contains forward-looking statements in regard to forecasts, targets and plans of Mitsubishi UFJFinancial Group, Inc. (“MUFG”) and its group companies (collectively, “the group”). These forward-lookingstatements are based on information currently available to the group and are stated here on the basis of the outlookat the time that this document was produced. In addition, in producing these statements certain assumptions(premises) have been utilized. These statements and assumptions (premises) are subjective and may prove to beincorrect and may not be realized in the future. Underlying such circumstances are a large number of risks anduncertainties. Please see other disclosure and public filings made or will be made by MUFG and the othercompanies comprising the group, including the latest kessantanshin, financial reports, Japanese securities reports,Integrated reports and annual reports, for additional information regarding such risks and uncertainties. The grouphas no obligation or intent to update any forward-looking statements contained in this document.In addition, information on companies and other entities outside the group that is recorded in this document hasbeen obtained from publicly available information and other sources. The accuracy and appropriateness of thatinformation has not been verified by the group and cannot be guaranteed.The financial information used in this document was prepared in accordance with Japanese GAAP (which includesJapanese managerial accounting standards), unless otherwise stated. Japanese GAAP and U.S. GAAP, differ incertain important respects. You should consult your own professional advisers for a more complete understandingof the differences between U.S. GAAP and Japanese GAAP and the generally accepted accounting principles ofother jurisdictions and how those differences might affect the financial information contained in this document.This document is being released by MUFG outside of the United States and is not targeted at persons located in theUnited States.2

ContentsPart 1Digital strategy1. Key initiatives of MUFG Re-Imagining Strategy2. Initiatives for digital transformationPart 2Part 3Major initiatives456101. Settlement, cashless2. Transforming customers’ channels / BPR3. Open innovation111926IT strategy supporting digital transformation311.2.3.4.IT investment strategyIT architectureUtilizing the cloudWork style reforms323335373

Part 1: Digital strategy4

1. Key initiatives of MUFG Re-Imagining StrategyEleven transformation initiatives “Eleven Transformation Initiatives” have been outlined in the new medium-term business plan (MTBP)as specific initiatives to achieve the MUFG Re-Imagining Strategy “Digital Technology” is essential to support all other initiativesHeadofficeSales Channel3Wealth Management4New Model for Wholesale Banking in Japan5Real Estate6Asset Management in Japan7Institutional Investors8Global CIB9Overseas Operations10Human Resources11Corporate Center Operations1Digital TechnologyCustomer segmentEleven Transformation Initiatives25

2. Initiatives for digital transformationMUFG’s approach Promote digital transformation from 3 different perspectives: “Improve”, “Reform” and “Disrupt”ImproveReformDisruptImprovements based on existingbusiness models and processesReforms via changes inbusiness models and processesDisruptive innovation employingunconventional thinkingImpactDisruptExternal inputPublic competitionfor ideasAIFuture bank branchesReformData utilizationImproveOnline applicationproceduresExternal inputSTP*1 for back officeoperationsOnline bank counterPaperlessTimeDigitalization*1 Straight-Through ProcessingInnovation6

2. Initiatives for digital transformationIncrease in net operating income through various initiativesAspiration for FY23 (final year of next MTBP)( bn)Achieve further bystructural reform20080Revenue growthAchieve further bystructural reform100120Cost reduction0As of May 2017(Announced MUFG Re-Imagining Strategy)As of Feb 2019(Estimate)7

2. Initiatives for digital transformationInitiatives in each areaIndividualsCorporatesHigh-endThe massesFocus areaAreas working with alliancepartners, etc.Payment /P2P settlementProductsOn-line data lending P2P lendingMicroinvestmentBusiness related tocryptocurrencyMediumSME settlementPOSCloud fundingOn-line data lendingLargeInternationalremittanceTrade ICO(Initial Coin Offering)Business financialmanagementCloud (PFM)Middle / backAPIPlatformFinancial informationstreamingEfficiencyReal Estate TechTechnologiesAppliedStreamliningfinancial sicIoT(Internet of Things)*1 Machine learning *2 Deep learning *3 Natural language processingRegTech(Regulation Technology)BiometricidentificationCyber securityQuantumcomputingAI (ML*1, DL*2)AI (NLP*3)8

2. Initiatives for digital transformationInitiatives in each areaIndividualsCorporatesHigh-endThe massesFocus areaPart2-1Areas working with alliancepartners, ness related tocryptocurrencySME settlementPOSCloud fundingOn-line data lendingChannelsMiddle / backPart2-2Financial nBasic*1 Business Process ReengineeringTrade finance(Initial Coin Offering)Business fundmanagementCloud accounting(BFM)PersonalReal Estate TechInternationalremittanceICOData art2-2MediumPayment /P2P settlementOn-line data lending P2P t of Things)BiometricidentificationRegTech(Regulation Technology)Streamliningfinancial operationCyber securityNew technologiesQuantumcomputingAI (ML*1, DL*2)AI (NLP*3)9

Part 2: Major initiatives10

1. Settlement, cashlessCircumstances where people use payment services People can select the optimal payment methods suited to their individual circumstance E-money will become a mainstay settlement method, in addition to bank transfers, direct debit payment andcredit card paymentPurchase of consumer goods and services (spot payment)Brick-and-mortar channelCash only stores(shopping streets,small stores)E-commerce channelTransportation Stores with cashless paymentterminals (convenience stores,expensesupermarkets)Shopping websitesSubscription1SUBSCRIBE24HCredit carde-moneyCashIncreased use of newpayment servicesIndividual(incl. payroll)MoneytransferDepositP2P settlementBank transferDirect debit / credit cardRentUtility billsMobile phone billsDirect debitTax(mortgage repayment)TAX%Periodic paymentFinancialinstrumentssuch as stocksand insurance Others11

1. Settlement, cashlessLegal perspective of payment instruments In response to growing calls from around the globe for the prevention of money laundering, banks have spentconsiderable expenses to put in place monitoring and other countermeasures and establish a safe and securesettlement infrastructureLegal perspective of payment instrumentsBanksMoney transferservice providersPrepaid paymentinstrumentsCredit cardsPointsCryptocurrencies1234 5678 1234 5678PCTransaction volume*4JPY 58.3tn / yearIssuancevolume*5JPY 1.8tn / yearSpot tradingvolume*6JPY 12.7tn / yearInstallmentSales ActN/APaymentServices ActReload: Yes,Exchange to: NoNo(withdrawal only)Exchange to:Yes, Exchangefrom: NoUnlimitedNo(1) At accountopening, (2) Transferover JPY 100thd,(3) Exchange overJPY 2 mmN/AManage separatelyfrom provider’saccountServicesMarket size(FY17)Inter-bank transfer*1JPY 2,860tn / yearVolume*2JPY 1.1tn / yearIssuance volume*3JPY 23.7tn / yearRuling lawBanking ActExchang-eabilityUnlimitedUp to JPY 1mm /transactionKYC*7(1) Account opening,(2) Cash transactionover JPY100thd,(3) Withdrawal of cashover JPY 2mmSending/receivingover JPY100thd,closing recurringremittance contractNoAt signing up forcredit cardapplicationConsumerassetprotectionDeposit insurance100% deposit50% depositFrauds arecovered byinsuranceRetainingfundsPossiblePayment Services Act*Notes 1-6 are explained on page 38*7 KYC based on Act on Protection of Transfer of Criminal ProceedsNo retentionPossible12


1. Settlement, cashlessThree layers of settlement business (S/P/I) Services (“S”) are provided via coordination between a platform (“P”) and infrastructure (“I”) While a number of new players are entering “S” fields, there is a growing call for more open andsecure “P” and “I”Three layers of settlement businessDominant service“S”1MUFG WalletApp(Services)Issuer (Value)Issuance function“P”(Platform)Payment interface(QR code, NFC*1 etc.)Payment processing bymerchants (POS etc.)QR code settlementby smartphone2coin(MUFG coin)1Token requesteragent serviceTransaction settlementat merchantsNetwork“I”(Infrastructure)Ledger / Data Base3New Payment NetworkBank account1 MUFG Wallet / Token requester agent service Page15*1 Near Field Communication2 coin (MUFG coin) Page 16 3 New Payment Network Page 17-1814

1. Settlement, cashlessMUFG Wallet / Token requester agent serviceMUFG Wallet1Token requester agent service (TR agent) Realize secure and centralized management of variouspayment methods, such as debit cards, credit cards and QRcodes, via the tokenization of information being transferred inthe course of settlement Future technological advancements are expected to allowsmartphones to carry everything people need in their wallets,such as driving license and e-receipts Initiate the development of robust infrastructure capable ofproviding highly secured settlement services in anticipation ofan IoT-driven society Work with TIS Inc. to commercialize a “token requester agentservice” that utilizes functions for token distributionmanagement developed in MUFG WalletEstimated amount of tokenissued in domestic market asof FY23: 70 to 100mm*1 / yearVarious paymentmethods to be carriedon a smartphone MUFG Wallet1234 5678 1234 56781234 5678 1234 56781234 5678 1234 5678Add everything in awallet to a smartphonein the future平成31年2月19日まで有効123,456Token Requester(TR)TR Agent(TR-TSP)Token ServiceProvider 456123,456*1 Estimated by TIS inc. Connect TR to TSP Request token issuance to TSPon behalf of TR15

1. Settlement, cashlesscoin (MUFG coin)2Aiming for practical useScreen image Aim to build an eco-system that goes beyond a cashless tool The digital currency issued by MUFG will provide a safe andsecure platform to support the economic zones of eachbusiness operatorBusiness operators createtheir own economic onomic zone networkPowered by MUFGRefillQR code paymentColored coin serviceEducation Business operators can issue original coins through the use ofMUFG coin’s infrastructureCompany AAPI / DataCompany BValuecoin’s platformCompany any BValue issuerReliabilityCompany BValueScalabilitySystemPlatform16

1. Settlement, cashlessNew Payment Network (1)3 Jointly established Global Open Network, Inc. to strengthen strategic alliance with Akamai Technologies, Inc.(“Akamai”)Establish Global Open NetworkStrong presence in thepayment business80%ServiceIntelligent edge platform,which offers world-classspeed and securityGlobal Open NetworkHigh-capacity processingHigh availability andprevention of falsificationProcessing capability ofTaking advantage of themerits of blockchainover 1mm transactionsper secondand making it difficult tomanipulate transactionrecords, etc.20%Global Open NetworkAim to providean open payment network in Japanbased on advanced new blockchain platformProcess massive traffic in the network andprovide value management*1 as wellPlan to launch in FY20H1NameGlobal Open Network, Inc.CapitalJPY 250mmShareholdersMUFG 80%, Akamai 20%CEOHironori Kamezawa*1 Management and credit/debit of credit limit and account balance for business operatorsGlobal accessibleHigh reliability and securityHigh speed connectionLeading edgecyber securityfrom anywherein the worldleveraging Akamai’sinfrastructure17

1. Settlement, cashlessNew Payment Network (2)3Strengthen collaborations with IoT platform operatorsWant to pay the feeaccording to the volumeof the usageEmergence of cashless and IoT-driven settlement methods,widespread use of a business model targeting micropayment usersTelematics insurance*1Car-sharingData collection through IoT device010100111010110101010100111Massive dataPurchase contents onautomatic driving010110101IoT platform operatorsSmart home etc. 100・・・・・ 120・・・・・ 500・・・・・ 100・・・・・ 120・・・・・ 500・・・・・ 100・・・・・ 120・・・・・ 500・・・・・ 100・・・・・ 120・・・・・ 500・・・・・ 100・・・・・ 120・・・・・ 500・・・・・ 100・・・・・ 120・・・・・ 500・・・・・Data analysisFilteringSettlement dataGlobal Open NetworkPayment businessoperatorsSecure responsiveness to a varietyof payment methods in the IoT eraP PPPoints,e-money1234 5678 1234 56781234 5678 1234 56781234 5678 1234 5678A platform supporting a largenumber of micropaymentsCredit cardsDigitalCC C currency*1 Telematics is a neologism combining “Telecommunication” and “Informatics.” Applications of telematics include communication devices mounted onautomobiles or other moving objects for transmitting driving data like distance travelled and hours on the road as well as data on the driver’s operational habits.This information can be used by insurers to analyze driving patterns and thus calculate optimal insurance premiums for individual drivers1818

2. Transforming customers’ channels / BPRDomestic branch network Retail and commercial banking units work in close collaboration to meet a variety of customer needs andenhance user convenience while striving toward a more robust and productive branch network(Put full-fledged branch*1 at the ce