Ant Financial is one of the most influential fintech companies of today which is shaking up the banking industry (The Economist, 2019).
Valued at $150bn in 2019, which is 50% bigger than Goldman Sachs, the company originates from Alipay. The latter is an online payment service, just like Paypal, founded by Alibaba in 2004 to serve buyers and sellers on the Chinese shopping website Taobao (The Guardian, 2018). Alipay became very successful in China: It reached 700 M active users and a transaction value equivalent to 65% of Chinese GDP in 2017.
In 2011, Alipay was rebranded as ‘Ant Financial’. Through ecosystems, it started to offer “financial services for insurance, credit, loans, credit scoring, and wealth management” (Applico, 2019). This expenditure in the financial services was possible owing to the huge consumer audience the company has. Followingly, Ant Fortune, a product of Ant Financial, has attracted many asset management firms in China since it facilitated them to reach clients and get clearer insights (Finews Asia, 2018). Thereby, they moved their operations to the platform and were able to connect with 180 million users (Applico, 2019).
The amount of ‘big data’ the company manages helped it to offer various products to its consumers, like Yue Bao. The latter makes use of Alipay consumer data and invites consumers to invest even small amounts in their Alipay wallet. By including these over-looked non-corporates, Yue Baeo has became world’s largest money fund worth $251 billion in assets, in 2019.
Another data-driven product is Mybank, which provides credits to small enterprises. Since company can track shopping habits, the amount of time to pay off debts, and numerous other characteristics related to people’s transactions on its platforms, Mybank can calculate a credit score and lend money.
In summary, Ant Financial is actually imitating the banks. Moreover, they facilitate people’s lives by connecting every platform they might need: From restaurants reservations to wealth management. Then, why wouldn’t traditional banks fear being replaced by such powerful player?
References:
Applico. (2019). How Ant Financial Became the Largest Fintech in the World. [online] Available at: https://www.applicoinc.com/blog/ant-financial-services-platform-largest-fintech-in-world/ [Accessed 6 Oct. 2019].
Finews.asia. (2019). Ant Financial’s AI Threatens Wealth Managers. [online] Available at: https://www.finews.asia/finance/27092-ant-financial-s-use-of-ai-can-threaten-wealth-division-in-banks [Accessed 6 Oct. 2019].
Kuo, L. (2019). ‘Digital wallet’ of Ant Financial captivates China and beyond. [online] the Guardian. Available at: https://www.theguardian.com/technology/2018/may/28/digital-wallet-of-ant-financial-captivates-china-and-beyond [Accessed 6 Oct. 2019].
The Economist. (2019). Young people and their phones are shaking up banking. [online] Available at: https://www.economist.com/special-report/2019/05/02/young-people-and-their-phones-are-shaking-up-banking [Accessed 6 Oct. 2019].
