The ultimate guide to China fintech
China has one of the largest and most advanced fintech ecosystems with leadership in key growth areas like blockchain.
The suspension of the Ant Group IPO has put the global spotlight on Chinese fintech. But aside from Ant there are hundreds of other fintech firms making up what is one of the world’s most advanced fintech ecosystems. In this report, the latest in our series on the risks and opportunities in the world’s key fintech markets, we analyse China. We draw on the results of three proprietary surveys we conducted of 20 Chinese fintechs, seven incumbent firms and 100 consumers, allied to desk research into a total of 1,018 local fintech firms.
China fintech landscape
We examine the fintech landscape in China, fintech success factors, future strategies, innovations and growth constraints, and the impact of fintechs on customers. We also study listed financials, telecoms and technology sector incumbents in the country to assess how they are responding to the fintech threat. And lastly, we analyse the results of our survey of Chinese consumers to ascertain their current financial product preferences and future expectations, and what these mean for Chinese fintechs.
We conclude that:
- The country’s fintech ecosystem is profitable and well-diversified, and it has reliable access to funding;
- China is showing clear global leadership qualities in up-and-coming segments, such as blockchain applications; and
- Customers value Chinese fintechs for, above all, product quality, responsiveness to their needs and strong (and improving) security.
Looking ahead, Chinese fintechs are likely to gain customers both by increasing the size of the pie (enfranchising financially excluded customers) and/or by taking market share from traditional providers. Our research shows that the key strategies to drive this growth include raising operational efficiency, enhancing management expertise and investing in technology, (including innovations targeted at easing the customer onboarding process, incorporating blockchain technology into the business and developing chatbots to provide automated customer assistance).
Growth constraints to watch include competition from the informal sector, access to funding and, of course, broader market trends.
The fintech landscape in China
Thousands of Chinese fintech firms are engaged in a wide range of activities, such as:
- Blockchain: for example, Onchain, which provides digital wallet, identity authentication, data collaboration and data storage services
- Financial exchanges: for example, BitOcean, which makes bitcoin ATMs that let consumers deposit and receive bitcoin through ATMs
- Software as a service (SaaS): for example, JD Digits, which applies machine learning, behaviour recognition and other artificial intelligence to help traditional industries operate with higher efficiency
China’s fintech boom has helped raise financial inclusion levels, with listed behemoths such as Tencent offering financial services to a mass market that has traditionally been poorly served by incumbent firms. As well as the large target population, a previously favourable regulatory environment has helped foster China’s large and diverse fintech ecosystem. However, the recent suspension of the Ant Group IPO has now generated some uncertainty regarding the regulatory outlook. We touch on these issues below.
This report first appeared on Tellimer.com. To read this article in full article, go here.
