Published Date : Dec 03, 2015
Around the world, the banking, financial services, and insurance sector is undergoing a transformation due to the latest technology. Furthermore, consumers and banking institutions are now moving towards online banking. The number of physical branches in the western markets has shown dramatic reductions. Although this is not really the trend in the eastern markets, still online banking is a force that cannot be ignored any more in this region.
China is one of the key emerging markets in the east. The banking sector in these two countries is also undergoing a dynamic shift due to the trend of online banking. In China, altogether, a new banking modern is coming up. The government in China is supporting non-government firms to invest in financial institutions. Furthermore, many private companies have been allowed to open their own banks. When the government in China announced these plants, the three tech companies which are Alibaba, Baidu, and Tencent have jumped at this opportunity.
In January 2015, Tencent, the firm behind the popular app WeChat took the plunge and launched China’s first online-only bank called WeBank. This online only bank deals with selling financial products to other organizations and also grants small auto and personal loans. WeBank has been able to ratchet a huge number of users and assets in a short period of time. Recently after Tencent, Alibaba set up its MYbank. This online only bank deals with three kinds of loans that are indirectly tied up with Alibaba’s core business which is one for people in rural regions, one for Internet startups, and another for Taobao and Tmall sellers. Mybank deploys cloud computing.
Last month Baidu declared its decision to launch its Baixin Bank that is in cooperation with CITIC Bank, a conventional bank. This model by Baidu is slightly different from Alibaba and Tencent. Baidu allowed CITIC to hold a share of 51 per cent and provides services both offline and online. Driven by these trends, many contract manufacturers such as Foxconn are now focusing on the finance sector. These new banking model have many advantages and will grow in number in the foreseeable future.