In a world that embraces disruptive technology, China’s most prominent financial technology company, Ant Financial Services Group, would probably have no problems morphing into a bank, even without licenses.
Beginning as an online payment processor called Alipay supporting Alibaba Group Holding’s flagship e-commerce platform Taobao, Ant Financial has expanded into wealth management and microfinancing. Alipay now controls 70% of China’s mobile payment market, while Yu’e Bao, which serves as a repository for cash leftover from online spending, emerged as the world’s largest money market fund this year with $165.6 billion of assets under management.
Founded in October 2014, the unicorn, formerly known as Zhejiang Ant Small and Micro Financial Services Group, has been valued at $60 billion since last April, on a par with the Swiss bank UBS.
“They are expanding their services from single payment to every aspect of your financial life, so [it’s] definitely going to be the largest consumer bank in China,” said Linda Wong, CEO of Neo Financial, a Shenzhen-based financial services provider. “Because China, by definition, is the largest consumer market, which means the largest consumer bank in the world.” Wong runs the online wealth management platform xiaoniu88.com.
Speaking at a conference sponsored by The Economist in Hong Kong recently, Wong noted that Chinese fintech companies were leading the way by virtue of attracting half of the world’s public or venture capital, while creating huge economic value, enabling some $12 trillion yuan ($1.8 trillion) in transactions in 2015.