(Yicai Global) May 22 -- Executives at Chinese fintech firms claimed the country is leading the cutting-edge industry at the Yicai Tech and Innovation Conference held on May 19.
"The global financial center is in the US, but the online financial center is in China," said Hu Xiaoming, president of Alibaba Group Holding Ltd.'s [NYSE:BABA] cloud services division, Aliyun. "China is three to four years ahead of America in fintech."
National policies, its large population, a relatively complete industrial ecology and the One Belt, One Road initiative are all contributors to the rapid development of fintech in China, he added.
"Fintech is defined as focusing on providing professional financial services with specialized technological strength," said Yang Wenbin, chairman and general manager of Howbuy, a third-party investment consultancy. "We have been serving a growing number of people with fintech services, from leading the first domestic open-ended fund in 2000 to launching the first wireless app for public fund offerings in 2009, and bringing in Tencent Holdings Ltd. [HGK:0700] two years ago."
Technology plays an important role in the credit industry, said Cong Yu, chief financial officer at Yirendai Ltd. [NYSE:YRD], an online consumer finance marketplace in China. Yirendai needs to use the internet to collect customer data, control risks and build models, which can be time-consuming and difficult, he added, saying that Big Data technology helps the firm cut operating and customer costs.
Tang Yang, chief executive at CashBus, described his company's approach to integrating technology and finance. "Each employee has more than two monitors in front of them, just like engineers at tech firms," he said. "But we offer services to the general public. Our clients are mostly drivers, cooks, waiters and the like. Users usually download our app, which authorizes us to collect personal data, then we'll use algorithms to determine how likely it is they will be able to repay loans."
"The data CashBus uses to compute customers' credit profile is mostly from telecoms carriers, e-commerce platforms and social security records," Tang added. "We even use their browsing history on major e-commerce websites."
Last year, Alibaba unit Ant Financial dubbed itself a tech-fin firm, rather than fintech, said Yu Peng, a senior expert at the firm. The company plans to focus more on technology, and strives to build the best algorithms it can to provide results that will help the financial industry better serve customers.
"The financial sector has masses of data," Yu said. "Artificial intelligence, machine learning and voice processing can all be applied to the sector in a bid to create more value for users."
The integration of finance and technology is an urgent need, said Howbuy's Yang. Financial professionals need to know more about technology and technicians need to understand finance better. "Half of our staff are involved in research and development and risk control of financial products, while the remainder work on information technology. Versatile talents that excel in both areas are scarce."