Fintech

China’s fintech scene is a phenomenon

Written by Chris Skinner

When it comes to fintech, there are two major countries to watch – America and China – but China does it all rather differently. Story by Chris Skinner.

When I was growing up, America was the superpower that we followed, and Russia was in a Cold War. Today, there are two superpowers – America and China – and Russia is still in a bit of a Cold War that might be thawed by Donald Trump. So when it comes to fintech, there are two major countries to watch – America and China – but China does it all rather differently, because it can. So, here’s a few highlights about fintech China of late.

First, China’s fintech prowess is rising fast. Investors in fintech in Asia pumped $9.62bn into these new ventures between 1 January and 31 July 2016, more than twice the $4.26bn invested in the region in all of 2015, according to Accenture’s analysis of CB Insights data.

Fintech investment in Asia-Pacific is on the rise. Source: Accenture Research analysis on CB Insights data.

Not only is it the region with the biggest investment in fintech this year, but also one where its eight unicorns are worth almost $100bn.

Second, the largest of those unicorns is Ant Financial, valued at $60bn. Not bad for a fintech startup, but that’s because it gets tech, and offers a marketplace of bank services from apps to APIs to analytics.

Third, Ant Financial thinks global and is moving Alipay into the hands of Chinese consumers across the world, and soon all consumers. Here’s a good overview of Alipay:

… and note, it’s not a payment app or mobile wallet, it’s a mobile world of everything from travel to investments to socialising to shopping. That’s why, according to a statistic Alipay used in a recent presentation, it is now paying for more transactions than cash in China.

Fourth, there’s a very different mentality in China, such as the peer-to-peer lending platform that demands young, female borrowers send them naked selfies for account opening. Why? Because if you default on your loan, the naked selfies of you will be released online.

In China, peer-to-peer lending platforms demand young, female borrowers send them naked selfies for account opening.

(If you find this crazy, then read more at Life.SREDA’s blog.)

Finally, because China had no financial infrastructure in place 20 years ago, much of what’s there today has come from nowhere. It has all been implemented in just the last 20 years. This is possibly why the country has the largest fintech numbers of anywhere in the world. In 2015, internet finance in China was worth more than $1.8tn.

In 2015, internet finance in China was worth more than $1.8 trillion. Source: CNNIC; iResearch; McKinsey analysis

READ NEXT: Banks beware as P2P lending rises in China

– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Main image: baur, Shutterstock.com

About the author

Chris Skinner

Chris Skinner is an independent commentator on the financial markets through the Finanser, and chair of the European networking forum the Financial Services Club, which he founded in 2004. He is an author of numerous books covering everything from European regulations in banking through to the credit crisis, to the future of banking.

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