China’s financial services industry is undergoing significant changes, driven by the proliferation of data and emergence of new technologies. How can the financial industry find ways to leverage AI, big data and blockchain to improve customer acquisition, risk control or capital management?
- Our recent ReFinTech Summit in Beijing examined China’s fintech opportunities and challenges, including how to embrace technology in shaping the future of finance.
- A shortage of technical skills within China’s financial services industry is regarded as a key challenge for the adoption of more sophisticated fintech applications.
- Taking advantage of China’s fintech opportunities requires the industry to co-operate on building an ecosystem that is innovative, cohesive and mutually beneficial.
Technology has become the “engine” of the financial services industry, with plans for its transformation and advancement fueled by China’s fintech opportunities.
Aided by an abundance of data and the desire to be compliant with regulations, financial institutions are increasingly recognizing the importance of being data driven.
Yet, the true value of this data is still to be fully realized in Chinese financial services.
For technology to truly empower finance, all parties need to embrace active communication and co-operation in order to build a fintech ecosystem that is innovative, cohesive, advanced and mutually beneficial.
This message was at the heart of the recent ReFinTech Summit in Beijing, which was organized by Refinitiv, Zhongguancun Software Park, ThoughtWorks and InfoQ to explore the themes of driving technological change and the future of finance.
Some 340 delegates attended the event and took part in discussions concerning the latest trends in financial technology and how the industry can collectively enable a sustainable future.
The reality of fintech in China
Industry leaders at the summit highlighted the need to stimulate consumption growth through financial innovation, whether through the development of SMEs, encouraging innovation and entrepreneurship, or promoting economic development.
During a round-table discussion, delegates acknowledged that financial institutions are highly dependent on information technology and want to actively embrace modern financial technologies such as artificial intelligence (AI), big data, cloud computing and blockchain.
However, sophisticated fintech applications based on these new technologies are still not apparent in China, mainly due to a lack of talent and knowledge in both the financial industry and the application of these new technologies.
China’s fintech opportunities
Although large-scale expansion of fintech R&D has its challenges, the continued advancement of the financial services industry and investment in professional talent means that innovation and application of fintech will continue to grow at a healthy pace.
Panelists at the summit’s business sub-forum spoke about how technology and data have specifically been enabling the growth of the fund management industry.
The successful application of new technologies has facilitated a faster response to business needs and network collaboration.
On the other hand, financial services have helped open doors to more digital advancements. As the industry remains competitive, commercial banks and traditional financial institutions are forced to adapt to market changes and embrace emerging technologies.
They need to pick up the pace of reacting to new and diverse financial needs of the market, and leverage fintech to reshape their traditional service models.
Blockchain adoption
The summit heard from Li Lihui, the former President of the Bank of China who leads the Blockchain Research Working Group of the China National Internet Finance Association.
He shared that China has been working on overcoming the bottleneck around the reliable application of blockchain technology in order to achieve large-scale adoption.
However, he pointed out that the standardization and institutional construction of China’s blockchain technology have only just begun.
He said enterprises should pay close attention to improving technical standards, security specifications, and certification review systems for blockchain finance, and clarify the legal definition of digital assets, as well as effectiveness of smart contracts.
Overcoming fintech challenges
Experts from renowned companies, including Baidu’s fintech arm Du Xiaoman, Sinovation Ventures, and Huobi Group, also shared their views on the most cutting-edge examples of innovation and fintech.
Regardless of which segment of the financial industry, the capabilities of corporates to integrate data remain the key to the overall development of big data technology and an AI-driven future.
At present, the main problems faced by financial institutions are customer acquisition, risk contol and capital management. Fintech is expected to solve these problems efficiently through technologies such as big data and AI.
Du Xiaoman has applied AI technology in many areas to achieve better results, such as strengthening big data risk control capabilities, as well as improving customer acquisition and operational efficiencies.
In the process of enterprise development and optimization, the first thing to consider is how to deal with complex financial data service systems and how to integrate a large number of internal business platforms into one without affecting the service to existing customers.
Zhao Yi, Refinitiv’s Technical Director, commented that corporates need to first concentrate on storage and the distribution of data to enable the new system to serve customers and generate business from the very first day.
The next step is to gradually expand the scope of services and introduce old customers to the new platform.
The future of finance in China
Moving forward, emerging technologies such as cloud computing, big data, AI, and blockchain will continue to be closely integrated and applied.
In terms of the specific application within the financial industry, financial cloud systems and big data platforms will be utilized to a larger scale.
Next generation information technology is forming a converged ecosystem and pushing the development of China’s fintech opportunities onto a new stage.
Refinitiv will also continue to promote the ecological development of the industry, and work closely with industry professionals, regulators, partners and developers, to explore China’s fintech opportunities and together drive the sustainable development of the financial industry.
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