Research from international consultancy KPMG highlights rapid growth in the adoption of fintech by Chinese banks at the smaller end of the size spectrum.
“Compared to large-scale banks, small and medium-sized banks are accelerating breakthroughs in their own fintech applications and capability,” said Liu Xiaoguang (柳晓光), KPMG China’s consulting partner for financial digitisation and fintech, to China Securities Journal.
Liu said that fintech is having a profound impact upon competition in the Chinese banking sector, with the larger banks using independently developed technology to “reshape” their own operations and ecosystems, and regional banks availing themselves of external assistance to transform certain operations and services.
Liu points out that small and medium-sized banks face a number of challenges when it comes to fintech adoption however, including insufficient data accumulation, poor data quality, risk control shortcomings, personnel shortages, weak R&D capability and lack of external resources.
Data from the China Banking and Insurance Regulatory Commission (CBIRC) indicates that in 2020 Chinese banking sector financial institutions made IT investments worth 207.8 billion yuan, for YoY growth of 20%.