Orient Corporation

There is a risk of incurring losses due to delayed customer payments or deterioration in receivables collection. Economic downturn or an increase in personal bankruptcies may necessitate additional provisions for bad debts, and in the Overseas Business, fluctuations in prices and employment conditions in Southeast Asia may affect business performance. As countermeasures, the company is working on updating its AI-utilizing screening system, introducing performance-based credit standards, recording bad debt provisions using statistical methods, and revising credit standards and strengthening the receivables collection framework overseas.

If procurement interest rates rise due to an interest rate increase greater than expected or a significant credit rating revision, this may lead to increased financial expenses and difficulty passing the increase on to lending rates. Unexpected interest rate increases due to continued global inflation and the impact of US tariff policy and geopolitical factors are recognized as a top risk. The company addresses this through adjustment of the long-short funding balance via ALM and the use of derivative transactions.

Significant changes in financial conditions or a major credit rating revision may make it difficult to secure funds smoothly, or may force fundraising at significantly unfavorable interest rate levels. In addition to implementing ALM, the company works to mitigate liquidity risk through diversification of funding methods, establishing commitment lines with multiple financial institutions, and adjusting on-hand liquidity.

If a cyberattack causes computer system outages, data tampering, or leakage of important information, this could result in a wide range of impacts including disruption to customer services, liability for damages, regulatory sanctions, and additional costs. The company has established a dedicated department, the "Cybersecurity Office," and has implemented measures including 24/7/365 monitoring via an integrated SOC, establishment of the Orico CSIRT framework, supply chain management, and training and drills for officers and employees.

Given the nature of the business, which holds large volumes of customer information, if important information is leaked due to unauthorized external access, incidents during physical media transport, or involvement of internal parties, this may result in liability for damages, loss of stakeholder trust, and regulatory sanctions. The company has implemented organizational, technical, personnel, and physical measures, including the development of information handling regulations, system security measures, education and training for officers and employees, and access control at facilities.

If a large-scale computer system malfunction, negligence or fraud by an outsourcing partner, or a natural disaster occurs, this may disrupt customer services. The risk that aging information assets and insufficient system development capability due to staff shortages could cause a core system failure, damaging stakeholder trust through personal information leakage or business suspension, is recognized as a top risk. The company addresses this through securing backup systems, formulating contingency plans, and conducting regular surveys and evaluations of outsourcing partners.

The amount of fraudulent use and fraud-related damage involving credit cards and similar products remains at a high level industry-wide, which could depress business performance and damage stakeholder trust. The company has implemented multi-layered fraud prevention measures, including an AI score-equipped fraud detection system, efforts toward introducing biometric authentication, 24-hour monitoring and blocking of phishing sites, and awareness activities for members.

Changes in domestic and overseas laws, regulations, policies, and business practices, including the Installment Sales Act and the Money Lending Business Act, may have a significant impact on business performance and business development. There is also a risk of regulatory sanctions if the company fails to respond to regulatory changes and violates laws and regulations. The company has established a framework for promptly identifying the location and scale of regulatory change risks and reporting them to the Comprehensive Risk Management Committee, as well as reporting business verification related to relevant laws and regulations to the Compliance Committee.

Against the backdrop of a declining working-age population due to the falling birthrate and aging population, along with diversifying values, securing necessary personnel may become difficult, potentially reducing competitiveness. In particular, if the securing and development of specialized personnel in the DX and AI fields is insufficient, this poses a risk of disruption to business operations, and if efforts to respect human rights are deemed insufficient, this may also damage stakeholder trust. The company addresses this through improving employee engagement, hiring experienced personnel and developing compensation systems for specialized personnel, and conducting human rights due diligence.

As a physical risk, there is a business continuity risk such as data center power outages caused by extreme weather events like typhoons and heavy rain, and as a transition risk, the volume of gasoline used car Auto Loan handled may decline due to the advancement of the sharing economy and subscription markets. The company addresses this through establishing business continuity management regulations and conducting drills, setting up a provisional emergency response headquarters in the western Japan area, and promoting the development of products and services that align with the trend of shifting from ownership to usage, such as Auto Lease.