<h2>Client Background</h2><p>Furusato Nozei, or "hometown tax donation," is a Japanese tax system that allows residents to donate to local governments of their choice. In return, the donation amount is deducted from their residence or income tax. As a token of appreciation, donors can choose from a variety of thank-you gifts offered by the region, such as local specialty products, food, or crafts.</p><p>Introduced by the Japanese government, this system aims to address regional development challenges and, by revitalizing local economies, bridge the tax revenue gap between urban and rural areas. It also encourages donors to reflect on how taxes are used and empowers local communities to strengthen and promote their unique appeal across Japan.</p><p>Furusato Choice, operated by TRUSTBANK, is one of Japan’s largest platforms for the Furusato Nozei system. Partnering with over 90% of municipalities nationwide, it offers more than 760,000 return gifts (as of October 2024), ranging from local specialties and daily necessities to experience-based options such as activity tickets and accommodation vouchers.</p><h2>Challenge</h2><p>Despite its position as a leading platform in the Furusato Nozei system, Furusato Choice’s smartphone app faced several challenges that limited its potential.</p><ul><li><b>Lack of app-specific convenience and enjoyment:</b> The app largely replicated the website’s content and failed to provide a distinct advantage or enjoyable experience for users, leaving donors unconvinced of its added value.</li><li><b>Balancing the fun of gift selection with awareness of regional issues: </b>While users enjoyed browsing return gifts, the app did not effectively provide opportunities to learn more about local communities or the issues they face.</li><li><b>Limited exposure to lesser-known regions, leading to donation concentration:</b> Donations tended to go to well-known municipalities or popular return gifts, reducing visibility for lesser-known areas. This narrowed the range of gift options and limited donors’ opportunities to connect with new regions.</li></ul><h2>Recursive’s Solution</h2><p>To improve the user experience on the Furusato Choice mobile app—ultimately raising awareness of regional issues and helping donors discover new municipalities—Recursive partnered with TRUSTBANK to develop <b>Choice AI</b>, a personalized gift recommendation agent powered by Retrieval-Augmented Generation (RAG).</p><p>Deployed as a chatbot within the Furusato Choice mobile app, Choice AI engages users with a friendly greeting and asks clarifying questions to understand their preferences. It then analyzes user responses alongside internal data (e.g., demographics, browsing behavior, past donation history) and external factors (e.g., holiday schedules, seasonal trends). Using this information, it retrieves the most relevant gift options from a database of approximately one million items.</p><p>To further improve recommendation quality, Recursive implemented collaborative filtering, an advanced retrieval technique that suggests items based on how users with similar preferences and behaviors have interacted with various gifts.</p><p>To ensure data security and privacy, Recursive established a comprehensive information security policy aligned with relevant laws and guidelines. Choice AI is designed with multiple layers of protection, including encryption, access controls, vulnerability management, and log auditing. These measures ensure that users can confidently engage with Choice AI without compromising their personal information.</p><img src=/content/images/image_db9acf0890a33bb1c5f4ced5e16533b7.png><h3>Performance Evaluation</h3><p>Before deployment, Recursive tested Choice AI using Large Language Model (LLM)-based mock users designed to simulate realistic donor behavior, including characteristics such as age, gender, and hometown. Choice AI was evaluated across four difficulty levels:</p><ul><li>Very Easy: The user knows exactly what they want and provides relevant information without being asked.</li><li>Easy-Medium: The user knows exactly what they want but only shares relevant information when specifically asked.</li><li>Medium: The user is unsure of what they want and only provides relevant information when prompted. However, they can envision using the gift for a specific event.</li><li>Hard: The user does not know what they want and only provides relevant information when prompted. However, they can be persuaded to choose a gift if it is well presented.</li></ul><p>Choice AI achieved an impressive accuracy of 78%, significantly outperforming the existing recommendation system, which relied on weekly or monthly popular items. These results demonstrate Choice AI’s ability to deliver smarter, more engaging, and highly personalized recommendations, greatly enhancing the donor experience.</p><img src=/content/images/image_ed3a2b42b4275017ee717c83a4a2ba63.png><h2>Results</h2><p>The introduction of Choice AI enhances the functionality of Furusato Choice, providing donors with a more seamless and personalized experience in discovering donation destinations that match their individual preferences. This aims to achieve the following outcomes:</p><ul><li><b>Promote the use of the Furusato Nozei system:</b> By providing personalized recommendations for return gifts and donation destinations, the system encourages more users to participate, helping municipalities secure additional funding for local development.</li><li><b>Increase app downloads and user engagement:</b> With a more attractive and intuitive user experience, the app boosts donor participation and engagement, ultimately strengthening financial support for municipalities. The improved convenience and appeal also help retain existing users and attract new ones.</li><li><b>Improve donor satisfaction: </b>Personalized recommendations and a smoother donation experience enhance donor satisfaction and encourage ongoing use of the platform.</li></ul>

Recursive partnered with TRUSTBANK to develop a personalized gift recommendation agent for the Furusato Choice mobile app.

“The collaboration with Recursive, using their cutting-edge AI technology, will be a significant driving force in our pursuit of achieving independent and sustainable communities. We will aim to build sustainable regional societies by first focusing on enhancing the donor experience on Furusato Choice, and also expanding our collaboration to support municipalities and other relevant sectors.”

Promoting Regional Development with AI-Powered Gift Suggestions

<img src=/content/images/image_1861fb4d2ddfb36fc03fc984c754ec1f.png><h2>Client Background</h2><p>Kyoikudojinsha Co., Ltd is a Japanese publisher specializing in teaching materials for elementary and middle school students. Guided by its vision of creating a future where every child can maximize their diverse potential, collaboratively solve challenges, and contribute to a happy society, Kyoikudojinsha is committed to developing high-quality, tailored educational materials that meet diverse needs.</p><h2>Challenge</h2><p>Paper-based homework and tests remain predominant in Japan’s education system, particularly in elementary schools. Grading these materials manually requires significant time and effort, adding to the already heavy workloads of teachers. Digitalizing and automating these tasks is essential for improving efficiency and enhancing the quality of education.</p><p>To address this challenge and contribute to the digitalization of education, the client sought to develop a tool capable of automatically evaluating students’ handwritten math answers in their workbooks. Kyoikudojinsha selected Recursive as its development partner due to our expertise in custom AI development and our shared vision of creating a better future for generations to come.</p><h2>Recursive's Solution</h2><p>Recursive developed an advanced AI Grading Assistant that automatically evaluates elementary school students’ handwritten math answers. The assistant supports core mathematical functions, including addition, subtraction, multiplication, and division with both whole numbers and decimals, as well as linear (horizontal) and column (vertical) calculations.</p><p>Students can upload photographs of homework and tests directly from Kyoikudojinsha's math workbooks through a web app accessible on PCs, tablets, and smartphones. The assistant intelligently interprets the handwritten input, converting it into a machine-readable format for analysis, computes correct solutions, and provides instant score results.</p><img src=/content/images/image_183923ac7d09ca637b398fb45c5ac8ec.png><h3>High Accuracy and Compliance</h3><p>The assistant was fine-tuned to adhere strictly to Japanese government guidelines for scoring output. In addition to accuracy, answers must follow specific task completion formats to be considered correct, ensuring compliance with standardized educational practices.</p><p>Recursive’s engineering team, in collaboration with the client, collected and labeled the vast amount of handwritten math answers to fine-tune the model. This extensive dataset significantly enhanced its performance, resulting in highly accurate recognition of answers and precise identification of key elements within the handwritten input.</p><img src=/content/images/image_c44268e92e98dd181f2c297e151d16cd.png><h3>Security and Future Development</h3><p>Recursive always prioritizes security and data control. The grading assistant runs entirely on our own secure GPU infrastructure, ensuring that all data remains protected and fully controlled by the client.</p><p>In the future development stage, Recursive plans to expand the AI assistant’s capabilities to cover a wider range of elementary school math problems and implement a performance aggregation system to compile scores into individual student records. This will enable personalized learning while supporting the effective use of educational data in schools.</p><img src=/content/images/image_2800c3c8b1ab3b5391092056e5e484ed.png><div class="callout"><span></span><h2>Results</h2><p>The deployment of Recursive’s AI grading assistant delivers:</p><ul><li><b>Faster grading</b>: Automated scoring in just 10 seconds, significantly reducing teachers’ grading time.</li><li><b>Reduced teachers' workload</b>: Streamlined workflows with less paperwork and fewer manual corrections.</li><li><b>Consistent accuracy</b>: Reliable assessments that ensure fairness and minimize grading inconsistencies.</li></ul></div>

Recursive developed an advanced AI Grading Assistant that automatically evaluates elementary school students’ handwritten math answers. 

“Recursive’s sustainable approach to reducing the burden on teachers, who are essential to the growth of the next generation, closely matched the future we envision for our company. This alignment made us confident that Recursive is the right partner to move forward with, and we chose them accordingly.”

Enhancing Education Efficiency with Automated Grading

<img src=/content/images/image_43e2d5fddea38189a3b42c7f75b9f634.jpg><h2>Client Background</h2><p>KDDI Corporation is one of Japan’s leading telecommunications companies, headquartered in Chiyoda-ku, Tokyo. KDDI offers a wide range of mobile and fixed-line personal communication services through its au brand, as well as business solutions. As part of its efforts to implement generative AI in its operations, KDDI aims to create new value by partnering with startups that possess advanced capabilities in developing state-of-the-art AI solutions*.</p><p><i>*KDDI CEO Message, May 2024, https://www.kddi.com/english/corporate/kddi/president/.</i></p><h2>Challenge</h2><p>KDDI promotes its services through online advertising campaigns, which must be adapted for different platforms and user behaviors. At the same time, ad creatives must adhere to strict brand guidelines, ensuring consistency in logos, colors, and messaging while staying true to the brand’s values. This process requires skilled professionals who invest significant time and effort to get it right.</p><p>Although tools exist to streamline ad banner creation, they rarely leverage first-party advertising data (e.g., click-through rates). As a result, creative decisions often rely on the experience of designers and marketers rather than clear, data-driven insights, making it difficult to measure effectiveness.</p><h2>Recursive’s Solution</h2><p>To address these challenges, Recursive, in collaboration with the KDDI group company, developed an AI-powered, data-based ad creative generation system. It enables the semi-automatic creation of ad banners while ensuring alignment with KDDI’s brand guidelines and the four visual identity styles defined for the au brand. Once the banners are generated, the system automatically selects those with the highest AI-predicted advertising effectiveness based on past campaign performance.</p><p>The system’s pipeline integrates two AI models: the <i>Image Generation Model</i> and the <i>KPI Prediction Model</i>.</p><h3>Image Generation Model</h3><ul><li><b>High-Quality Image Generation:</b> The model leverages the latest image diffusion technology to generate realistic human images based on text descriptions while avoiding exaggerated or stereotypical elements associated with Japan that are commonly found in models trained on Western datasets (e.g., kimonos, anime-style).</li><li><b>Visual Identity Customization:</b> The model detects trigger words in prompts and applies style-specific adjustments to elements like lighting, contrast, and color. This ensures that images align with one of the au brand’s four visual identity styles—clean, friendly, playful, and advanced.</li><li><b>Automatic Prompt Translation:</b> Since the model’s API only supports English input, Recursive integrated automatic Japanese-to-English prompt translation using a large language model (LLM) to ensure seamless functionality.</li><li><b>Image-to-Image Functionality:</b> In addition to text-to-image generation, the model can modify elements of an input image—such as adding, removing, or changing accessories, clothing, hairstyles, etc.—based on the user’s prompt.</li><li><b>Faster Processing:</b> Recursive developed a request handler with asynchronous processing to efficiently manage multiple tasks. This significantly enhances response speed and ensures smooth performance for multiple users.</li><li><b>Background Removal:</b> Since the images are designed for banners, the model includes automatic background removal, which can be activated by adding a specific trigger word to the prompt. This makes post-editing easier and more efficient.</li></ul><img src=/content/images/image_be9fdbad3e1bef788ad3934446e7f756.png><h3>KPI Prediction Model</h3><ul><li><b>Accurate CTR Prediction:</b> Using a custom neural network architecture, the model predicts click-through rates (CTR) for different audience demographics (e.g., age, gender). This provides the client with data-driven insights into audience engagement and ad effectiveness.</li><li><b>Real-Time Performance Estimates:</b> The model generates predictions in less than one second, enabling the client to assess how a finalized but unreleased banner will likely perform in an ad campaign.</li><li><b>High Accuracy Results:</b> Recursive trained the model on a wide variety of historical data from different social media platforms provided by the client. This extensive training enabled the model to predict content performance levels with 72% accuracy.</li><li><b>Cost-Effective Deployment:</b> The model offers efficient processing time, even when running on standard CPU hardware, facilitating easier deployment and reducing operational costs.</li></ul><img src=/content/images/image_d5bef342f008ca86f55d8b3db9af1ca8.png><div class="callout"><span></span><h2>Results</h2><p>The deployment of the ad creative generation system is set to deliver a significant impact:</p><p><b>1. Workload Reduction:</b> Beta testing confirmed that the system reduces the time spent by 50% on the following key tasks:</p><ul><li>Design planning (layout design, font selection, image selection, etc.)</li><li>Draft creation (background creation, color selection, font and image placement/size adjustment, etc.)</li><li>Finalization (adding effects such as shadows, image retouching, etc)</li></ul><p><b>2. Improved CTR:</b> Ad creatives are selected based on AI-predicted performance, ensuring maximum impact across platforms.</p><p><b>3. Expanded Creative Possibilities:</b> AI-generated, high-quality human images offer greater variety in ad creatives without increasing costs. Marketers can experiment with different styles and concepts, making campaigns more diverse and engaging within the same budget.</p></div>

Recursive, in collaboration with the KDDI group company, developed an AI-powered, data-based ad creative generation system.

“When translating corporate issues into concrete solutions, Recursive can offer a wide range of perspectives as they have not only engineers with expertise in information engineering but also experts with extensive experience in the marketing and business fields.”

Transforming Ad Creatives Generation for a Leading Telecommunications Company

<h2>Client Background</h2><p>NeXT FOREST Corporation., a joint venture between IHI Corporation and Sumitomo Forestry, aims to protect tropical forests in West Kalimantan, Indonesia, through the sustainable management of tropical peatlands—unique ecosystems composed of accumulated organic matter from dead plants.</p><p>Tropical peatlands are highly effective carbon sinks, storing twice as much carbon in the soil as all the world’s forests combined. They support the growth of massive trees that form rainforests, sustain diverse ecosystems, and provide habitats for many endangered species, such as the orangutan.</p><h2>Challenge</h2><p>Tropical peatlands are highly sensitive to human activity and climate change, relying on specific environmental conditions to remain stable—particularly proper groundwater levels. When these levels drop too low, peatlands can dry out, becoming highly flammable and susceptible to forest fires, which release vast amounts of stored carbon back into the atmosphere. Additionally, as peat decomposes in drier conditions, it further increases CO2 emissions, contributing to climate change.</p><p>One striking example occurred in 2015, when a forest fire in Indonesia burned 2.6 million hectares of forests, releasing approximately 1.3 billion tonnes of CO2 into the atmosphere—more than the annual emissions of many countries. This was a global-scale environmental disaster.</p><p>Traditionally, managing water levels in peatlands has involved experienced technicians manually surveying the land and creating detailed topographic and contour maps at 50-centimeter intervals. This labor-intensive process can take up to five years to complete.</p><h2>Recursive's Solution</h2><p>To address these challenges, Recursive utilized over 10 years of groundwater data collected by Sumitomo Forestry in the forests of West Kalimantan. By combining this data with expert knowledge on topography, vegetation, waterways, and meteorological conditions, Recursive developed a fully custom AI model from scratch. This model integrates machine learning with physics equations to create a high-resolution mesh map of the area and accurately forecast groundwater levels seven days in advance, with a precision of 6 cm.</p><p>The model is designed to predict when groundwater levels approach thresholds associated with potential hazards, enabling stakeholders to take prompt preventive actions. This proactive approach helps reduce peatland degradation and lowers the risk of devastating forest fires.</p><img src=/content/images/image_fd630d65b8a590ba4429b218c3c67fa7.webp><p>Following the initial development phase, Recursive’s engineering team visited West Kalimantan, Indonesia, to further enhance the AI model. On-site observations and direct feedback from engineers and workers operating the irrigation system played a crucial role in refining the solution.</p><p>This trip will enable the Recursive team to incorporate additional parameters that were previously unavailable or incomplete, such as variations in soil quality based on altitude, data on dam types, and the dynamics of water flow. These improvements in future stages will ensure our solution continues to evolve to meet customers’ needs. Learn more about this trip in our<a href=https://recursiveai.co.jp/en/blog/borealis-project-background-report/> blog post</a>.</p><img src=/content/images/image_a27c358f661b50a3df7fdce56ed4f6b3.png><p><i>Recursive team is preparing to get groundwater level measurements in West Kalimantan, Indonesia.</i></p><div class="callout"><span></span><h2>Results</h2><p>Recursive's AI-powered groundwater management solution delivered impactful and measurable results:</p><ul><li>1,200 km² of tropical peatlands are efficiently monitored and managed, enhancing oversight and reducing degradation risks.</li><li>Prevented the release of approximately 300 million tons of CO₂, contributing significantly to climate change mitigation.</li><li>Operations are now significantly faster, reducing reliance on lengthy manual surveys and decreasing the workload for employees.</li><li>AI simulations have optimized dam placement and irrigation planning, ensuring better resource management and sustainable water usage.</li></ul></div>

NeXT FOREST Inc., a joint venture of IHI Corporation and Sumitomo Forestry, uses Recursive’s AI-physics model to predict groundwater levels in Indonesia’s tropical peatlands. 

“Recursive has a strong track record and excellent engineers. Their knowledge of biophysics, in addition to their engineering perspectives, was a tremendous strength and a great source of reassurance.”

Case studies

Promoting Regional Development with AI-Powered Gift Suggestions

Enhancing Education Efficiency with Automated Grading

Transforming Ad Creatives Generation for a Leading Telecommunications Company

AI Plays a Part in Sustainable Forestry

Leading enterprises trust Recursive

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