World’s Biggest Bank Sheds Light on Its Fintech Strategy


The world’s largest bank in terms of assets is adopting a unique fintech strategy that involves both an internal fintech department and an independent fintech subsidiary alongside a trio of operations centres.

On 8 May the Industrial and Commercial Bank of China (ICBC) launched its fully invested fintech subsidiary ICBC Tech Co., Ltd. (工银科技有限公司) in the Xiong’an New Area of Hebei province.

In an interview with 21st Century Business Herald, senior executives from ICBC’s internal fintech department and ICBC Tech shed light on the Chinese mega-bank’s unique approach to fintech.

ICBC describes the structure of its fintech strategy as consisting of “one department, three centres, one company” (一部、三中心、一公司).

The one department refers to ICBC’s internal fintech department, which was created in November 2018 following the integration of its information technology department and product innovation management department.

ICBC’s fintech department is primarily responsible for the overall planning and management for the Chinese mega-lender’s technology line.

ICBC differs from other Chinese banks that have established their own fintech subsidiaries in its decision to retain an internal fintech department with existing personnel.

The “three centres” refers to ICBC’s data centre, software development centre, and business R&D centre.

ICBC’s R&D centre came on line at the end of 2018, and is main purpose is to “strengthen the integration and linkage between operations and technology, and optimise resource allocation at the source from the main perspective of operations.”

The “one company” refers to ICBC Tech, ICBC’s wholly invested fintech subsidiary which was launched on 8 May of this year.

Internally, ICBC Tech’s purpose is to “energise the group’s smart banking strategy and become an incubator and driver for fintech innovation,” while externally it seeks to “energise innovation in the operations of group clients, and become a new driver and model for the creation of a ‘finance + industry’ (金融+行业) ecosystem.”

Ma Yan (马雁), general manager of ICBC’s fintech department, said that ICBC’s internal fintech department will remain responsible for the overall planning of technology and operations, while the fintech subsidiary will have independence in other areas.

“On the one hand the establishment of the fintech subsidiary is to resolve the issue of an innovation incentive mechanism,” said Ma.

“On the other hand, the functions that the subsidiary possesses for external delivery and technological opening can establish a large tech ecosystem chain.”

Li Liuxun (李六旬), general manager of ICBC Tech, said that the subsidiary’s recruitment strategy did not involve the simple wholesale transfer of internal fintech personnel.

“We did not want to create too great a shock for the current organisational structure,” Li said.

“We used market-based mechanisms to select over one hundred people (from the three centres) as seeds for the foundation, then used campus recruitment and public recruitment to expand to 200 – 300 people.

“Within the next 2 – 3 three years we hope to expand to around 500 people in scale.”

ICBC Tech also hopes to obtain leading personnel via strategic investments in tech start-ups.

“By means of equity investments in outstanding tech companies, we can appoint technical personnel for initial trials…if things are viable then we can expand to internal usage by the group.

“In future we will even consider company acquisitions.”

Li said that the focus for ICBC Tech will be serving B (industry) and G (government) end clients, before expanding to C (consumer) end clients, while its key roles will include client IT systems R&D, client IT system operation and entrustment, tech product sales and delivery, and tech innovation and staffing.

“At present we have already undertaken operations in the government services sphere, in areas including financial ecosystem clouds and the blockchain, and have also already taken up several dozen projects,” said Li.

ICBC Tech has ambitions to participate in joint “finance +” (金融+) projects that require cooperation with external organisations, in areas including smart government administration, transportation, education and healthcare.

The company is already working with the government of Xiong’an New Area on the “Xiong’an Resettlement Administrative System” (雄安征迁安置管理系统) and the “Rights Registration Blockchain Platform” (权益登记区块链平台).

At least ten Chinese banks have launched their own fintech subsidiaries, including the three big state-owned banks of Bank of China, China Construction Bank, ICBC, as well as Industrial Bank, Ping An, China Merchants Bank, China Everbright, China Minsheng and Bank of Beijing.