The former mayor of Chongqing municipality Huang Qifan (黄奇帆) expects Industrial Internet of Things (IIoT) financing to be the next major area of growth for the Chinese fintech sector.
Speaking at the 2020 Bund Financial Summit on 25 October in Shanghai, Huang, who is currently a special professor at Fudan University, said IIoT would be the next “blue ocean” for fintech development.
“IIoT finance involves enterprises as customers, and the provision of digitised financial services to productive operations,” said Huang.
“Because industrial value chains are more complex and these chains are longer, at present the IIOT digitisation ratio remains quite low, and financial services are still far from meeting the level of convenience, intelligence and digitisation of personal [financial services.]”
Huang said that the most “rational and promising model” for IIoT finance would be the organic integration of an IoT digitised platform with various financial institutions, for the formation of an “IIoT financing platform mutually integrated with the industry chains, supply chains and value chains of the real economy.”
According to Huang one of the key goals of IIoT finance would be resolving the financing difficulties of small businesses, who are still “long tail” clients of the Chinese finance sector subject to problems such as inadequate collateral, poor credit scores, information asymmetries and financing shorter cycles.