Today's Fintech in China: More Tech and Less Fin
The fintech sector in China has experienced early hype, inevitable disappointment and renewed excitement, and is now ready for wider adoption. This report is designed to analyze the key investment themes across Chinese fintech market.
In its early days, there was considerable hype about the Chinese fintech sector. In time, hype turned into inevitable disappointment followed by renewed excitement. Fintech is now ready for wider adoption due to its value addition for enterprises and consumers. This report is designed to analyze the key themes that characterize the Chinese fintech market and illustrate how disruptive technologies including artificial intelligence, machine learning, big data and cloud computing can solve pain points in fintech verticals. Specifically, the report includes:
A comprehensive background of the Chinese fintech market including answers to the top 5 questions that our readers ask about it.
An investors' guide to four industry verticals including business model analyses, enterprise moats, key risk factors and sector picks.
A roadmap to Chinese fintech unicorn startups that illustrates what services they provide for who and what visions the C-Suites have on business outlook.
We would like to begin the report by asking the fundamental question, "What is fintech?" Fintech is not a winner-takes-all market and we believe we have yet to see its full potential. What consumers can easily perceive fintech is the convenience it brings to their daily lives. Fintech allows Chinese consumers to pay without credit cards, secure loans via smartphone apps and engage in similar financial behaviors in a seamless way. Less obvious is the impact fintech providers are having on banks, brokers and dealers, asset managers and insurance providers. Such financial institutions can now deliver better products and services to end-consumers.
We classified the main fintech applications as Intelligent Risk Management, Intelligent Customer Acquisition, Intelligent Payment and Intelligent Wealth Management. Other minor applications include Intelligent Customer Support and Intelligent Equity Research, which will not be studied in this report.
Intelligent Risk Management and Intelligent Customer Acquisition are by far the most mature applications of AI/ML in the financial sector. Those two markets are expected to grow to USD 1.1 billion and USD 660 million in China by 2020 respectively. With scalable products and services along with low market penetration, the top-lines of industry leaders are expanding at more than 100% YoY and have the capacity for strong growth going forward.
Intelligent Consumer Payments, currently led by Ant Financial and Tencent, has brought a unique value proposition to the retail sector. An interoperable digital payment infrastructure is supported by biometrics verification (fingerprints, as well as iris, voice and face recognition). We anticipate these applications in the payment vertical to grow to a USD 490 million market in China by 2020.
Intelligent Wealth Management, or AI-based investing advisory service, remains a wait-and-see sector due to the slow-growing traditional wealth management industry in China. The commercialization timeline is still unclear and the priority of current players is consumer education, not profitability.
The version 1.0 was published on September 9;
The version 1.1 was updated on September 17, in which four industry maps were updated, including Intelligent Risk Management Providers, Intelligent Customer Acquisition Providers, Intelligent Payment Providers, and Intelligent Wealth Management Providers.