At present, the levels of marketization, digitalization and 'two-way opening' evolution in China's financial system have been significantly improved, and the 'technology enabling finance and financial service' capability has been significantly enhanced. The drive toward a modern financial system – with the main principle of 'making financial technology and innovation better and strengthening the financial industry' – is gradually improving.
On December 9-12, EqualOcean was holding the World Innovators Meet (WIM) 2020. This year, the event's main topic was 'Technology and Innovation Connect the World.' WIM2020 gathered innovators from Asia, Africa, Europe and the Americas to share their knowledge and key achievements, promoting the concept of 'Tech for Equal.'
The WIM2020 'Fintech Drives Financial Industry' conference was held on December 12 and was organized by the Shanghai Financial Association, the Shanghai Services Federation and the Investment Technology League, sponsored by Shanghai Xuhui district Development and Reform Commission (Finance department) and Comprehensive development and Xuhui Bingjiang area Construction Management Committee, and organized by Shanghai West Bund Development Group Co., Ltd and EqualOcean.
The conference invited important executives from government agencies, including Shanghai Financial Association, Hong Kong Land, Shanghai West Bund, Shanghai Xuhui District Development and Reform Commission.
Shanghai Financial Association Secretary-General, Youfu Tu
2020 was the year when Shanghai's financial center was completed, and Shanghai is now the central city with the most complete financial market. There are 17 financial markets in Shanghai, covering all kinds of national financial infrastructure such as stocks, bonds, currency, foreign exchange, bills, futures, gold, insurance and so on.
In 2019, Shanghai's financial market trading volume was 1933 trillion RMB, which was an increase of 18.6%. Besides, Shanghai is the most important gathering place for Chinese and Foreign financial institutions. At the end of 2019, there were 1,646 licensed financial institutions (institutions above municipal level); more than 500 were foreign financial institutions that ranked first in terms of quantity and scale.
"The financial industry has become the first pillar industry in Shanghai. In 2019, Shanghai’s financial industry was 11% of Shanghai’s GDP. In September, Shanghai surpassed Tokyo and ranked among the top three in the world for the first time. This achievement fully shows that the construction of Shanghai International Financial Center has made a qualitative leap in 2020," concluded Youfu Tu.
EqualOcean CEO, Yuanpu Huang
The application and alternation of technologies such as AI, blockchain, Cloud computing and big data have endowed the financial industry with 'new' strength. The change in consumer demand and fierce competition in the industry is also stimulating the start of a 'new' financial industry. From a global perspective, China's financial technology penetration rate has reached 87%, far higher than in developed countries – which indicates that China's financial technology development has entered a new track.
2020 has been a particularly special year. While the pandemic is spreading all over the world, causing untold harm, it is also forcing the digital transformation of the financial industry. In such a special year, under the influence of regulatory policies, technological innovation, demand-side and supply-side and the epidemic situation, financial technology and innovation enterprises are coming into their own.
In terms of valuation, financing status, time of establishment, major strategy in 2020 and innovative products or models, EqualOcean selected 50 global financial tech innovation enterprises with good development and released the Next 50 list in Global Tech in 2020. Based on this list, the Next 50 report focuses on the analysis of innovation opportunities and challenges in seven sub-sectors, such as payment technology, insurance technology, wealth management technology, banking technology, risk control technology, microtechnology and new financial infrastructure.
In the report, EqualOcean looks forward to the next four major trends in global financial technology:
1. Reconstruction of the ecosystem. As more enterprises integrate into the financial technology ecology, the financial technology ecological chain will be reshaped.
2. The scene is finely divided. The more subdivided financial scenario will become the core competitiveness of financial technology enterprises in the future.
3. Product diversification. In the future, financial technology enterprises will be involved in many fields of business rather than a single field.
4. The core technology will be quickly implemented. The core technology represented by blockchain will move from concept to scale application in three years.
Yuanpu Huang believes that the internal and external influences affecting China's financial industry are complex, and China's financial technology field will also present eight major trends in the future:
1. Finance belongs to finance and technology and innovation belong to technology and innovation. The idea of technology enabling finance and financial service is unshakable.
2. Under the 'license plate' economy, the status of the traditional financial system will rise, or it will become the main player in the market.
3. The Financial system will provide technology services for the vast majority of financial institutions.
4. Digital currency will be the core infrastructure of digital finance in the future.
5. From digitalization to 'datalization,' the infrastructure construction of the financial industry has become a new favorite for investment.
6. The opening up of the financial industry is an irreversible trend. China will take a more active part in international financial reform, global financial governance and international financial cooperation. China's voice, China's plan, and China's wisdom.
7. Financial regulation will be further 'centralized,' and the pace of supervision and market change will resonate at the same frequency.
8. Financial entrepreneurship will move from risk-taking to rationality, from grassroots to strength, from ecological platform to vertical segmentation.
West Bund Financial City Project General Manager, Haojie Wu
In the past ten years, the West Bund of Shanghai has been based on the Global City Excellence waterfront goal vision; it has therefore adhered to the 'planning, ecological priority and technology and innovation leading', and also has built a world-class waterfront public space.
Around the 'Art&AI' development strategy, Shanghai West Bund actively arranges five million scale benchmarking projects, such as the West Bund media port, the West Bund wisdom Valley, the West Bund Financial City, the West Bund Chuangyi Warehouse and the West Bund Fenglin Bay. Now, these five 'pearls' are connected through the chain of the Global City Excellence.
"Special attention should be given to the West Bund Financial City. The total construction area of the Financial City is about 1.8 million square meters. Guided by financial technology, the new version of the city will be built in the nearest future. It will integrate finance, technology and innovation, and build a new growth pole of the Shanghai International Financial Center. There is a new generation of financial development from Lujiazui to the West Bund Financial City that is the key battle to accelerate the upgrading of the Huangpu River. A 'Sky corridor' with a panoramic view of both sides of the Pujiang River will also become the new business card of Shanghai city," Ying Chen finished the conference speech.
Financial Services Department of Xuhui District Development and Reform Commission, Liping Zhou
Recently, the Shanghai municipal Party committee of the CPC Central Committee has successively published the '14th Five-Year Plan' for national economic and social development and the long-term goals for 2035. Liping Zhou shared the compilation of the ongoing '14th Five-Year Plan' for the financial industry of the Xuhui district. The compilation of the '14th Five-Year Plan' of financial industry planning is the first special industry plan for Xuhui District. It focuses on the strategic deployment of building 'five centers' and strengthening 'four major functions' of the financial industry in Shanghai, as well as the planning goal of Excellent Xuhui, model of the urban area during the '14th Five-Year Plan' period. This compilation makes some plans on how to improve the financial supply and efficiency in supporting the real economy.
This report is divided into 4 parts:
The development of the financial industry in Xuhui District during the '14th Five-Year Plan' period.
(1) Strength of the financial industry has been steadily enhanced;
(2) Financial institutions have been constantly enriched;
(3) Financial development environment has been comprehensively optimized;
(4) The level of financial services for the real economy has been further improved.
During the '14th Five-Year Plan' period, the financial industry is facing unprecedented opportunities and challenges.
In terms of risks, on the one hand, the global development pattern is accelerating restrictions. There are some risks of economic recession in developed economies, the development of emerging economies is divided, the 'anti-globalization' trend continues to heat up, the global political, economic, financial and trade patterns are accelerating in their speed of adjustment, and the instability and uncertainty are significantly enhanced.
On the other hand, resources and market competition are increasingly fierce. The process of regional economic integration is accelerating, and the competition among regional financial centers is becoming more aggressive. Beijing, Tianjin, Hebei, Guangdong, Hong Kong, Macao and other regional central cities have taken the construction of financial centers as an important part of the development of regional economic integration. Nanjing, Hangzhou, Qingdao and other regional central cities have also put forward the strategic goal of building regional financial centers. From the perspective of our city, Lujiazui, Lingang New Area, Free Trade Zone, the Bund and the North Bund all take the financial industry as the key industry; it can be seen that during the '14th Five-Year Plan' period, the Xuhui area is bound to face with a multi-party competitive pressure.
In terms of development opportunities, firstly, China's development is still in an important period of strategic opportunities. The new development pattern of 'dual cycle' will accelerate the formation of a new financial industry; the opening level of the financial sector will continue to expand.
Secondly, Shanghai's construction of a global financial technology center is developing at a deep level. Last year, the Shanghai headquarters of the people's Bank of China and the Shanghai municipal government successively published implementation plans for the construction of the Shanghai financial technology center.
Also, the new generation of information technology represented by big data, blockchain, Cloud computing and artificial intelligence is accelerating the breakthroughs. These technologies will play a huge role in preventing financial risks and improving financial operation efficiency.
The development of the financial industry during the '14th Five-Year Plan' period.
During the '14th Five-Year Plan' period, the main aim of financial industry development in Xuhui District has been to build Xuhui into a center at the forefront of financial technology and innovation development, technology and innovation agglomeration, and a financial comprehensive ecological highland. There are three directions:
(1) Shanghai's strategic goal of building a financial technology and innovation center;
(2) Highlight the development characteristics of financial technology and innovation of Xuhui District;
(3) Create a financial ecology suitable for 'Excellent Xuhui.'
Financial industry space layout during the '14th Five-Year Plan' period.
This planning is the first time to conduct an in-depth study on the development layout of the financial industry. Combined with the overall planning layout of Xuhui's '14th Five-Year plan,' as well as the development characteristics and resource potential of various regions, was determined three major financial industry agglomeration areas: one city, one circle and one district. One city: Xuhui Binjiang, a world-class waterfront financial city; one circle: Xujiahui Hengfu, an international characteristic financial circle; one district: Caohejing emerging technology development zone, an innovative science and technology financial zone.
During the '14th Five-Year Plan' period, the improvement of the Xuhui District is the principal aim of financial development.
Based on determining the layout, there are four objectives for the financial industry development over the next five years:
(1) Optimize the industrial structure and enrich the financial market level: focus on the development of financial technology industry; focus on the introduction of financial institutions' headquarters and foreign financial institutions; cultivate all kinds of new financial institutions; accelerate the gathering of financial intermediaries;
(2) Serve the real economy and broaden the financing channels of enterprises: in the next five years, Xuhui District will strengthen listing services, accelerate the pace of enterprise listing, improve multi-level capital market services, establish a dynamic discovery reserve mechanism and classification guidance system for enterprise listing, and increase the proportion of direct financing, strengthen the role of government investment funds and policy financing platform, enlarge the leverage effect of government investment funds, drive social capital and financial capital to invest in the key development industries, complete the new round of optimization and upgrading of the financing platform for small and medium-sized technology and innovation enterprises;
(3) Promote industrial integration and promote the linkage between technology and innovation financial industry: at present, the effective integration of financial technology and innovation has become an important starting point to achieve comprehensive innovation-driven and promote economic growth. The '14th Five-Year Plan' also puts forward the requirement of promoting the joint development of financial center and technology and innovation center;
(4) Create a first-class financial ecology and strengthen financial industry development support.
"During the '14th Five-Year Plan' period, we will continue to make efforts to optimize government services and business environment, improve the financial legal environment and credit system construction, strengthen financial supervision and risk prevention and control, and maintain financial stability and security," concluded Liping Zhou.
Hosted by EqualOcean, the World Innovators Meet (WIM) (click to watch the online event on December 9-11, 2020) is a global event for innovators. It provides limitless opportunities to learn from and connect with the most sought-after technology pioneers.
The World Innovation Awards (WIA) are announced at WIM to recognize game-changers across various industries and geographies. Selected by a committee of distinguished experts, entrepreneurs and investors, WIA are designed to acknowledge technology disruptors striving to make a positive impact on a global scale.
See this year's WIA lists and download the research reports in English and Chinese on EqualOcean and 亿欧智库 respectively.