A driver uses his smartphone to pay a road toll on the Hangzhou-Ningbo Expressway in Hangzhou, in Zhejiang province, with Alipay. Photo: AFP / China OUT

China has quickly became the global frontrunner in financial technology and is leaving the rest of the world painfully behind.

Indeed, half of the global investment in financial technology is happening in Asia, according to the World Economic Forum. Most of these investments are in China.

In a panel discussion in Davos titled the Global Fintech Revolution, top Chinese and global financial players discussed the changing financial landscape and the possibilities and threats that lay ahead.

The Chinese fintech revolution is most evident when it comes to mobile payment, as the country is undergoing a groundbreaking shift away from cash to digital payments – a sector dominated by Alibaba’s Alipay or WeChat’s payment service.

“The new generation of financial systems will be more inclusive, focusing on the underserved or unserved, including small-to-medium-sized enterprises (SMEs). Many of them could not get access to financial services before. But today it’s different as we can bring financial services to underserved people”, said Eric Jing, Chief Executive Officer of Alibaba’s financial arm, Ant Financial Services Group, the world’s most valuable fintech unicorn at US$60 billion.

In one small county in Tibet, for example, 90% of overall electronic payments are made through mobile payments, Jing claimed.

China’s banking system remains relatively undeveloped. One in five Chinese adults don’t have accounts, while around 80% of small and medium-sized enterprises are not adequately served by banks.

Among the country’s 710 million internet users – more than the United States and Europe combined – the utilization ratio for mobile online payments stands at 57.7%. In other words, more than half of the online population are using their smartphones to pay for goods and services.

Speakers in the Davos discussion also included Henry Blodget (Chief Executive Officer and Editor-in-Chief, Business Insider Inc), Francisco González (Group Executive Chairman, Banco Bilbao Vizcaya Argentaria SA), Dan Schulman (Chief Executive Officer, PayPal Inc), David Craig (President, Financial and Risk, Thomson Reuters), and Cecilia Skingsley (Deputy Governor, Swedish Central Bank).

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