A recent industry event for the Chinese banking sector has stressed the need for greater cooperation with fintech companies.
The Chinese Banker Forum (中国银行家论坛) was jointly held by The Banker and local fintech company Wecash (北京闪银奇异科技有限公司) on 16 September in Beijing, with the theme of “Model Transition Innovation, Setting out Again.”
Key speeches delivered by Huang Runzhong (黄润中), secretary of the China Banking Association, Jin Panshi (金磐石), chief IT supervisor at China Construction Bank, and Li Hao (李昊), joint founder of Wecash, all stressed the importance of cooperation between traditional banks and emerging fintech companies.
“During the course of future development fintech companies and banks will enter a state of open cooperation,” said Li Hao.
“Both parties will jointly establish virtual banks, digital banks, information banks and smart banks.
“There are an increasing number of banks choosing to cooperate with tech companies. Citibank for example is cooperating with LendingClub to provide related services in communities where lending services are inadequate.
“Wells Fargo is applying EyeVerify’s retina recognition technology to provide unrivalled security services to corporate customers, and Santander Group has purchased US fintech company Kabbage, to upgrade its competitiveness with respect to small and medium-sized business loans in the UK.”
Li Hao cited data from McKinsey indicating that 52% of the world’s top 100 banks are cooperating with fintech companies to strengthen their own digital capabilities.
According to Li increasing cooperation with incumbent tech giants is also an inevitable trend in future.
“Internet giants can cross borders to have a huge impact upon banks, relying upon technology to upgrade efficiency indices.
“While digitisation is shrinking profits in the banking sector, we can also see that digitisation can reduce the costs for banks to obtain clients, increasing operating revenues.
“2017 banking sector data from McKinsey indicates that compared to traditional banks, digital banks have seen the cost of obtaining clients fall by as much as 98%.”