A senior financial services exec at Alibaba Cloud says that microservices and collaboration with banks will be core parts of the future of Chinese fintech.
Speaking at the recent Ant Technology Exploratory Conference (ATEC) in Hangzhou, Alibaba Cloud financial president Xu Min (徐敏) said that a slew of technologies will lie at the core of fintech in future.
“I believe that the new finance will be digital finance supported by cloud computing, big data, artificial intelligence, the Internet of Things and the blockchain” said Xu.
“These five directions are what I believe are the key directions for financial institutions and fintech, with digital finance lying at the core of the new finance.
Xu highlighted in particular the key role of the concept of microservices for China’s fintech sector.
“Microservice itself is an IT concept…I’ve discovered that many such concepts are not just applicable to IT, but are also applicable to financial services and financial operations.
“I believe that distributed microservice structures can bring multiplier effects to the economy, meaning a manifold upgrade to transaction functionality, and a large-scale reduction in transaction costs.
“For example the distributed banking that we’ve developed with China Minsheng Bank has raised transaction capability from 7,800 per second to 30,000 per second.
“We’ve also provided modular innovations to China Guangfa Bank, increasing functionality several dozen fold, raising overall transaction capability enormously and reducing costs by a fifth.
“Based on such platform services innovation, their annual transactions volume is now equal to the total volume for the past ten years.”
Xu Min also stressed the importance of intelligent data and artificial intelligence.
“I believe that intelligent data will bring index effects to financial institutions,” said Xu. “Intelligent data and big data will change production material and production relationships – this change has only just started.
“For example collaboration with China Galaxy Securities has helped to raise the capability of the purchase prediction model for wealth management products.
“In the past 30% of customers failed to open an account – this number has since been reduced to 12 – 13%.”
Alibaba Cloud is also focusing in cooperation traditional banks and technical service provision – a shift made by many internet and tech companies as Chinese regulators step up their scrutiny of the fintech sector.
“We have had outstanding cooperation with a large number of banks, because their way of thinking is more open,” said Xu, who pointed to Bank of Nanjing as an example.
“We need to think clearly about what paths finance will take to achieve innovation…I believe that becoming a ‘platform’ isn’t the only way, and is in fact the most difficult path.”