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/   Insights

This article by Stefanie O’Connell first appeared on stefanieoconnell.com in November 2015. Confession – I’ve made a major mistake in growing my business. Though my earnings have climbed exponentially over the past two years, I found...

The benefits and challenges of the Internet of Things

February 3, 2016
/   Insights

The convergence of operations technology and information technology presents new and expanding market opportunities. The “Internet of Things” is a center point of this convergence. IoT can bring remarkable benefits to today’s ever-changing business...

Mobile Banking Surprises Yet to Come

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Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

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December 18, 2013
/   Spotlight

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/   Insights

Recently, the Banking.com team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

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/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

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Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

Financial services organisations in China are expected to shine a light for the rest of the world when it comes to innovation in the banking sector in the coming years, with the primary drivers being non-traditional companies that are looking to develop new payment solutions and platforms.

This is according to a new report by InnoTribe, which stated that financial technology pioneered in the country is set to change the way consumers around the world think about banking. It noted that instead of merely imitating business models from the West, Chinese firms are disrupting and redefining the industry, with an emphasis on ecommerce, mobile and peer-to-peer payments.

“Western banks are pursuing digital transformation projects that are dependent on a vendor community that may or may not understand the direction of change,” the report stated. Chinese firms, on the other hand, are investing in “highly scaled internet and mobile platforms” with architectures that are well-suited to digital banking.

A transformed environment

Despite the recent slowdown in the country’s economy and the associated difficulties this is bringing about, the report noted China’s transformation over the past 30 years has been nothing short of spectacular, as it has become the world’s second-largest economy and is threatening to overtake the US to claim the top spot.

The financial services industry has had a key role to play in this growth. While in the past, protectionist policies and almost limitless support for state-owned banks was the primary driver, this is now changing. The key catalyst was a series of measures passed in 2013 that made it easier to set up privately-owned competitors – something that China’s key tech players, such as Baidu, Alibaba and Tencent (BATs), have been quick to take advantage of.

This is unsurprising, as the boom in technology has been one of the major transformations in the country. At the turn of the millennium, just 1.8 per cent of the country’s population – some 22 million people – had access to the internet, and e-commerce and online payments were non-existent. By August this year, however, almost half the population was online, equating to 668 million people, or more than double the entire population of the US.

Tech firms lead the way

As a result of this, it’s unsurprising that it is technology companies that are leading the way when it comes to disruptive banking and payments solutions. Baidu, for example, while known primarily as a search engine, is also able to use the huge amounts of data it collects to forecast stock markets. In 2014, it launched the Baidu Baifa 100 Index fund with the China Securities Index Company. The fund not only sold out within the first morning, but has consistently outperformed the market since.

Meanwhile, Tencent has taken advantage of its large existing audience to offer financial products. For instance, its WeChat messaging app has over 549 million users – including almost 100 per cent of the country’s Millennials – and has leveraged this to offer them payment services. By adding such offerings to the app, the company has successfully built a platform that encompasses almost any day-to-day payment its users may wish to make.

“This platform approach is key and a unique difference in China,” InnoTribe stated. “In western markets like the US and UK, FinTech innovation is focused on singular applications. Lending Club provides P2P lending, TransferWise provides international payments and remittances, but no one is aiming for the extraordinary economies of scope delivered via a singular platform that is now the norm for BATs.”

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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp