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Business Dissection of Ant Group: One-Seventh of Global Population Uses Alipay [2/2]
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In the first part, we introduced Ant Group's digital payment services, here we discuss its digital financial service business. 

Digital financial services

Ant Group provides financial technology support to FIs and helps them to reach clients, including micro-credit companies, wealth management and insurance. The partners, including commercial banks, asset management companies, insurance companies, trusts, securities companies and other FIs, provide financial services to clients through the Alipay platform. The revenues are generated from the fees charged from the partners' interest income in credit services, assets under management (AUM) in wealth management services, and premiums in insurance services. The company also directly provides such services through its subsidiaries.

The users on Alipay that used more than one kind of financial service reached 729 million by the end of the second quarter of 2020, whose figures of money spent have surged 10 times since 2015. Within the sector, wealth management and micro-credit lending services dominate the business. 

Micro-credit platform 

Ant Group cooperates with FIs to offer credit lending that targets unserved consumers and unbanked SMBs. The micro-credit platform provides FIs with innovative product developments, customer reaching and risk management. Now Ant Group is the largest online consumption and business credit service provider. During the LTM at the end of the second quarter of 2020, the company helped over 500 million individuals and 20 million small merchants through cooperation with over 100 banks. 

Ant CreditPay (Chinese: 花呗) and Ant Cash Now (Chinese: 借呗) are the two main products that focus on individuals. The intelligent business decision model that can assess the credit performance of customers gives corresponding credit amounts to them immediately, which conveniences the customers, especially those with no credit cards, and helps them to build credit records. The credit given by Ant CreditPay can be used on applicable purchases both online and offline. The money cashed from Ant Cash Now can be withdrawn immediately after requests are issued to the Alipay account or bonded debit card. 

MYbank is the most important partner of Ant Group in offering business lending services, as the latter is the originator of MYbank with 30% of the shares held. The company focuses more on the clients' reaching and some technology supports, MYbank runs the credit assessment system independently and prices credit products. Both of them also offer third-party FIs with credit assessment system building.   

Now the sector accounts for the largest portion in the digital financial service sector, taking up 62% of the total revenue, and has been growing steadily.

Wealth management platform 

In 2013, Ant Group launched Yu'E Bao (Chinese: 余额宝), which is a basic asset management product for customers, and also the largest money market fund globally based on the AUM. What’s more, it cooperates with over 170 asset management companies to provide precise and varied products over 6000 different kinds to clients. In the twelve months through the end of June 2020, over 500 million users invested in the products through the Alipay platform. 

In order to recommend most suitable products to clients and better supervise their accounts' risk situation, Ant Group developed an intelligent financial advisor to simplify the matching process between products and clients. Along with the AI and big data technologies, the company offers customized investment courses and market information, as well as risk alarms on accounts to help them manage their wealth better. Also, through the company's platform, asset managers directly communicate with clients. 

Insurance platform

Ant Group helps insurance companies to offer innovative insurance products with lower price barriers and easier application processes. Through the Alipay platform, customers can access over 2000 insurance products that cover life, health and property insurance, and also some new products such as a 'mutual plan' that enables the users to invest and help others in advance, just like insurance. In the twelve months through the end of June 2020, over 570 billion users were covered in insurance plans through Alipay, which are provided by both Ant Group and over 90 third-party insurance companies. 

Editor: Luke Sheehan

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