China has one of the most dynamic FinTech industries worldwide. FinTech describes the further development of financial services using modern technology. In 2020, China’s internet users amounted to almost one billion which meant that a large share of the population had access to the internet. In addition to that, China was a world leader in the adoption of FinTech services leading the rest of the world by a large margin. This environment became the ideal breeding ground for a vibrant FinTech industry.
A digital gold-rush
Chinese companies have been the vanguard in transforming financial services. Since 2013, the revenue of China’s FinTech sector had increased more than 20-fold from 69 billion yuan in 2013 to an estimated 1.5 trillion in 2019. Entrepreneurs, as well as established financial service companies, had brought various services, such as credit, payment, and insurance services online. According to industry insiders, especially big data analytics and artificial intelligence are going to impact the FinTech industry.
Digital payments were the dominating product in the Chinese FinTech industry. Not only was it a very apparent product in everyday life, but it also has a large user base. By 2021, more than 987 million people would be usingdigital payments in China. That number exceeded the user volume of other services significantly. In the same year, the number of users of personal finance products amounted to 170 million while the number of alternative financing users totaled 15 million.
A bright FinTech future
According to market research, most services are forecasted to grow over the coming years. Despite already having a large user base, the number of digital payment users and annual transaction value were expected to increase by 2024. The survey projected a similar trend for personal finance and alternative lending services. Following the global trend of AI-based wealth management, the number of robo-advisor users, as well as the value of assets under management, was forecasted to grow significantly over the coming years.
Many enterprises emerged from China’s FinTech industry. In 2020, 18 FinTech unicorns with a combined market value of 239 billion U.S. dollars originated in China. The poster child of China’s FinTech industry was Alibaba’s AntGroup. Valued at 200 billion U.S. dollars, the company was the most valuable unicorn company worldwide. The company was a subsidiary of the e-commerce giant Alibaba and its main products were the digital payment provider Alipay, the wealth management platform Yue’ebao, and the credit service sesame credit.
