Qudian lnc, the Chinese micro lending company, has filed for a U.S. IPO at the NYSE earlier last month. It plans to raise up to USD $750 million in capital to spend on strategic acquisitions, marketing and borrower engagement. In only a few years, Qudian has become an eye catching internet lending company with a valuation of over $6.9 billion USD. Qudian’s remarkable success in such a short period of time, shows how profitable the cash loan market can be, as well as the incredible opportunities for transformation that can arise when collaborating with internet giants like Alibaba.
The Financial services sector is integrating AI (artificial intelligence), machine learning and predictive analytics at a remarkable rate for both customer-facing and back-end operations. One element commonly associated with AI, but one that has not yet made a strong impact, are ‘chatbots,’ computer programs designed to simulate conversation with human users. However, this could be about to change, with large financial institutions starting to experiment and launch products leveraging AI technology.
The equity market cross-connects between Hong Kong and Shanghai, and Hong Kong and Shenzhen have begun to show signs of growing maturity.
Bitcoin and blockchain technology has raised the specter of dis-intermediation for the leading global banks in the last few years.
There has been significant news published in the last week regarding regulation around initial coin offerings (ICOs) especially around the Chinese Government's position on ICOs in China. Finally, at 3.00pm, September 4th this Monday, seven important Chinese government departments including the PBOC, issued an announcement to stop any ICO transactions and defined ICOs in China as illegal fund raising. Strict ICO regulatory is the right choice but is this ‘One-size-fits-all Policy’ the right answer?
In August this year, WeBank announced that its lending product “Wei Li Dai” (WeChat Loan) has exceeded RMB100 billion (USD14.7 billion).
An efficient credit checking system is critical for the development of retail financial services. But in China, the individual credit system is not as advanced as the ones in US or Europe with the People's Bank of China (PBOC) credit system covering only about 25% of the entire Chinese population. The lack of credit investigation system creates a major issue for the risk control process of the financial services, especially on the inclusive finance side.
Yu’E Bao, the world’s largest money-market fund, may have to limit its individual investment amount at RMB500,000 (USD$72464), which is half of the amount the limit is now. The implications aren't for certain at this point, but it could mean the end of the platform's growth in the future.
The Chinese bond markets are becoming more accessible through regulatory initiatives and greater foreign investor participation.
On the last day of March 2017, Wang’lian (Internet Payment Union) started its trial operation after one year of preparation. The first group of companies that have joined the platform include: Wechat Pay, China Merchants Bank, Bank of China, and Chinabank Payment. The platform will effectively cut the 3rd party payment networks of Ant Financial and Tencent, and is likely the most important payment industry development this year, and it may not bode well for China's dominant digital payment companies.