Chinese tech firms are moving into the banking sector in a much different way then their Western counterparts. Whereas Western BigTechs like Amazon and Google seem content in serving financial institutions with cloud features and advertising, Chinese ones like Tencent and Alibaba seem far more interested in competing with financial institutions. For example, Tencent’s WeBank was China’s first private digital-only bank, one that made a net profit of USD 210 million with a return-on-equity of 19.2% in 2017, just its 2nd year of operation. In fact, a recent stake sale of the bank valued it at USD 21 billion, making it one of the world’s largest “unicorn” companies.
At the same time, Alibaba’s Ant Financial offers a number of products and services, including: Alipay, the largest mobile wallet in the world; Yue’Bao, the largest money market fund in the world; MYBank, an online lender for small businesses; Ant Fortune, a wealth management service; and Zhao Cai Bao, an investment marketplace. 6 months ago, they also launched a new health insurance service that has gained 50 million customers already and aims for 300 million within its first two years of operations. Ant Financial was valued at USD 150 billion in 2018, making it the 10th largest financial firm in the world in only its 5th year of operation.
There might not be the massive global change in banking that some soothsayers have been predicting, but there is likely to be one in China as tech companies rewrite how consumers interact with everything financial.