A new report forecasts surging growth in the Chinese market for banking sector fintech applications, as industry-wide changes force traditional lenders to shift business models.
The “Research Report on Fintech Companies Servicing the Banking Sector” (金融科技公司服务银行业研究报告) released by Yi’ou Zhiku (亿欧智库) says that the market for bank-related fintech applications is set to reach 11.6 billion yuan this year, before rising to 24.5 billion yuan by 2020.
“According to our investigations, irrespective of whether it’s the big state-owned banks or small and medium-sized banks, they all place great importance on the actual application of fintech,” said You Tianyu (由天宇), head of the Yi’ou Zhiku Research Institute to state media.
“On the one hand domestic banks are seeing challenges in their own businesses, with traditional operations on the decline and interest spread revenues shrinking…the growth of banks is facing an inflection point.
“On the other hand customer needs are changing, and our survey of consumer satisfaction indicates that fewer and fewer people are willing to visit bank branches, with the younger people the least willing. Consequently banks have no choice but to change their business modesl.”
PwC data indicates that 48% of Chinese financial institutions currently purchase services from fintech companies, while 68% plan to increase cooperation with fintech companies over the next three to five years.