The COO of Santander UK and Ireland highlighted China’s outstanding financial technology performance at a 5G forum in Shenzhen recently.
“We have seen some wonderful fintech companies, like Ant Financial, in China, but mostly their technology is focused on the Chinese markets, ” said Michael Harte, who says he wants “get Chinese fintech into the rest of the world.”
There is undoubtedly a broad consensus that Asia, particularly China, has become a global fintech hub.
EY’s Global FinTech Adoption Index 2019 report points out that emerging markets such as China and India are leading the way in fintech adoption. China has 87% fintech adopters among its digitally active population, which is the highest rate in the world. The number is only 71% in the UK and 46% in the US.
(designed by Asia Times)
Another Global Fintech Hub Report from China’ Zhejiang University points out that China leads in the number and percentage of fintech users. Of the top seven global fintech hubs, four are in China, two are in the US and one is in the UK.
(designed by Asia Times)
Chinese cross-border fintech brands are accelerating their pace of development. According to a China-based media think-tank, EO Intelligence, as the demographic dividend declines and domestic competition intensifies, Chinese fintech companies are seeking additional business opportunities abroad. Also, China’s fast pace of growth in AI, big data and cloud computing technology has facilitated the expansion of its fintech companies overseas, especially to emerging markets in Africa and Southeast Asia, etc.
In these emerging marketplaces, financial infrastructures are typically in an underdeveloped condition. Speaking of potential risks caused by fintech companies in these regions, Harte said Chinese fintech companies can bring positive transitions there despite the lack of financial infrastructure.
Harte said in an interview with Asia Times, “Chinese fintech companies will embed good rules and practices and make sure that products are suitable for customers in these regions. If people are given access to insurance, credit, risk management and saving products, it’s easier to grow their financial well-being, educate them and improve their financial literacy.”
In addition, fintech, by creating an open market, can consequently improve regulations and transparency in these marketplaces, added Harte.
For Chinese fintech companies expanding their businesses into the rest of the world, Harte sees several key opportunities.
One opportunity is the locations of fintech. Chinese fintech companies can set up incubators outside of China. In this way, they can avoid skepticism of China’s technology security concerns from western countries.
Another opportunity for Chinese fintech companies is focusing on establishing an open ecosystem and partnerships. An open ecosystem means the creation of incubators needs to be open enough to include diverse types of companies – large corporations, medium-sized corporations and start-up companies. Therefore, Chinese companies are able to build businesses in other marketplaces by being established within incubators.
As for partnerships, Chinese fintech companies can look to build partnerships with other countries’ organizations over a wide range of domains, such as identity, privacy, payment, data management, etc.
This article was written by Huang Wanyi in Chinese on ATimesCN.com. Huang also wrote the English version.