On June 20, Baidu announced a strategic partnership with the Agricultural Bank of China (ABC). Together, they aim to build an intelligent bank that uses big data, artificial intelligence (AI), and cloud computing in order to cooperate on building a FinTech laboratory, conduct in-depth research into the intelligent financial sector, and collaborate on financial products. Additionally, they aim to pool their assets and skills to better customer profiling, credit risk evaluation, intelligent equity financing, and investment services.
In March, Ant Financial formed a strategic partnership with China Construction Bank (CCB). Ant Financial operates Alipay – the world’s largest mobile and online payments platform – as well as Yu’e Bao – the world’s largest money-market fund. Ant Financial also runs a credit rating system, which is essential in China, as there is no official credit rating system. This partnership has the potential to shape the future of the FinTech industry, as it means a collaboration between Ant’s platforms and wide consumer base, as well as CCB’s diverse, and trusted, wealth management products. However, due to Chinese regulations, CCB cannot sell their investment products directly through Ant Financial’s platforms, thus it seems that CCB established “wealth accounts” on the platform in order to circumvent the regulations.
Nevertheless, this sort of regulation has not stopped other partnerships. Earlier in June, Jingdong (JD) Finance – a leader in the FinTech and AI industry, officially launched a comprehensive cooperation with ICBC – one of China’s biggest banks. Their partnership includes working on FinTech, retail banking, SME loans, consumer finance, asset management, and more. The plan for the collaboration is to use big data, AI, cloud computing, and other technology to their advantage in order to further the success and consumer reach of both platforms.
Another internet giant collaborating with a large Chinese bank is Tencent. Bank of China (BOC) – one of China’s big four state-owned lenders – and Tencent have established a joint FinTech laboratory. Their plan is focus on cloud computing, big data, blockchain and AI, in order to promote financial innovation, such as finance in the cloud. Tencent and BOC will set up their FinTech cloud platform to improve risk control and raise efficiency.
With the collaborations between China’s internet giants, and big banks, we can see the similarities between the services they have partnered for. The companies all see the potential growth in the artificial intelligence and cloud computing sectors, thus we can expect mass growth here – not only in China, but also worldwide. With the rapidly evolving technology, we can expect to see many accounting and finance tasks to be done automatically in the next few years. However, we must be careful to find the right balance between human and machine. Although firms want to minimize costs through the technological advancements, customer service and interaction still remains a large part of business for a firm – especially for banks in China.
In the near future, as these companies try to optimize their processes, we expect to see widespread advantages resulting from these collaborations. Future prospects show great potential for innovative products, and development of new service models. Additionally, the development of this sector of FinTech will mean a long term boost to the economy, and possible improved financial security systems. China’s service sector is expected to play a bigger role in powering the economy, as increasingly affluent Chinese consumers demand more diverse and better quality services.