The head of Baidu’s fintech spinoff has highlighted the role of the COVID-19 pandemic in driving the use of online financial services and fintech applications in China.
In an article written for Yiben Caijing Du Xiaoman Financial CEO Zhu Guang (朱光) said that the COVID-19 pandemic had served to “highlight the inestimable value of fintech.”
“This pandemic has accelerated the integration of finance and technology,” wrote Zhu.
“For the average consumer, urgent demand for online financial services increased during the pandemic, changing ‘passive need’ for online financial services into ‘active embrace.’
“For example, there has been a marked trend for middle-aged and old-age demographics towards online usage, which requires not only basic application design, but also a range of smart interactive services including remote facial signature, remote card opening, facial recognition and voice recognition.
“For financial institutions, expansion of offline operations was restricted, and they too needed to actively embrace fintech.
“On the one hand, a large volume of financial services demand shifted from offline to online, including personal services for loans, wealth management and insurance.
“On the other hand, rigid demand emerged for smart, online, digitised financial services, with even more financial institutions fully aware of the potential for online operations and fully online conversion of operations.”
Zhu points out that financial institutions in China that have focused on digitisation and online transitions are already capable of providing “zero touch” financial services, conferring them with a pivotal market advantage.
Zhu expects fintech’s role to continue increasing in the wake of COVID-19, with China using it to expand financial inclusion and drive more funds towards small businesses that urgently need it.
“On the one hand, as a key component of the infrastructure of the digital economy, fintech can help the financial sector rapidly transition towards ‘full online processing’ based on risk management,” wrote Zhu.
“On the other hand fintech will work with financial institutions to provide a blood infusion for micro, small and medium enterprises, and continue to accelerate integration with all the basic units within the economy, to drive domestic demand and stimulate economic vigour.”