Is the Future of WealthTech Already in China?
By Yvon Moysan
Master in Digital Marketing and Innovation Academic Director, IESEG School of Management
China, the Largest FinTech Market in the World
According to the Pulse of Fintech Q3 2016 report by global audit and advisory firm KPMG,1 venture capital (VC) funding in Asian financial technology companies increased, reaching US$1.2 billion – outpacing even the USA, where VC investment totalled US$0.9 billion. There are several factors driving this rapid growth. First, population: China has a population that is upwards of 1.3 billion. As a consequence, when addressing the Chinese market, one advantage online companies have is access to voluminous client and prospect data, which traditional financial service companies lack. Alibaba, for example, has more than 420 million customers,2 who have provided the company with behavioural data for years. Second, economic advancement: China is first in terms of GDP (purchasing power parity) at over US$20 trillion. Third, the massive adoption of mobile technology: China has almost 1.3 billion3 mobile phone users, many on 3G or 4G networks. In addition, and by 2020, the government plans to invest more than US$320 billion in broadband internet infrastructure, benefiting rural areas that lack established banking networks. Fourth, financial industry liberalization and regulatory acquiescence. Appropriately regulating financial services is challenging. If policies are too lax, investor risk increases. ...
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