Lead­ing China into the new fu­ture of fin­tech

Shanghai Daily - - HANGZHOU SPECIAL - Shi Jia

Hangzhou leads the coun­try in the boom­ing fi­nan­cial tech­nol­ogy sec­tor with just 13 com­pa­nies in­vest­ing a to­tal of US$23.88 bil­lion.

This com­pares with Bei­jing, which has the most fin­tech com­pa­nies — 58 with a to­tal in­vest­ment of US$21.19 bil­lion, ac­cord­ing to the Global Fin­tech Hub Re­port by Zhe­jiang Univer­sity’s Academy of In­ter­net Fi­nance and the Cen­ter for Al­ter­na­tive Fi­nance at Cam­bridge.

“Hangzhou is the hub for the pri­vate sec­tor, for cre­ativ­ity, in­no­va­tion and en­trepreneur­ship,” Ben Shenglin, dean of the Academy of In­ter­net Fi­nance, told the Money 20/20 con­fer­ence in Hangzhou last month. “We had an early start in fin­tech. Ali­pay started here in 2003 so we have a very strong dig­i­tal econ­omy.”

About 91.5 per­cent of res­i­dents in the city use mo­bile pay­ments such as Ali­pay or WeChat.

Tracey Davies, pres­i­dent and man­ag­ing di­rec­tor of the con­fer­ence, said at the open­ing that or­ga­niz­ers had in­vited 300 speak­ers with at­ten­dees com­ing from more than 40 coun­tries. And they were very ex­cited to be in Hangzhou as “it is a very im­por­tant global fin­tech hub.”

The Fin­tech Hub re­port looked at more than 70 cities around the world, fo­cus­ing on com­pa­nies worth more than US$50 mil­lion.

Four of the seven “global fin­tech hubs” — Bei­jing, San Fran­cisco, New York, Lon­don, Shang­hai, Hangzhou and Shen­zhen — are in China.

Zhou Jiangy­ong, Party sec­re­tary of Hangzhou, said in his open­ing speech that the city plans to be a hub of the coun­try’s dig­i­tal econ­omy and a global leader in fin­tech.

In 2017, the added value of the city’s fi­nan­cial in­dus­try reached 105.5 bil­lion yuan (US$15.2 bil­lion) while to­tal on­line sales are ex­pected to ex­ceed 1 tril­lion yuan con­tribut­ing to over half the city’s an­nual growth.

Hangzhou is home to Ant Fi­nan­cial, a unit of Alibaba and the world’s largest fin­tech com­pany by value af­ter rais­ing US$10 bil­lion in May.

The com­pany is in­vest­ing heav­ily in lead­ing tech­nolo­gies such as blockchain, big data and ar­ti­fi­cial in­tel­li­gence.

In June, the com­pany an­nounced in Hong Kong its first cross-bor­der pay­ment ser­vice pow­ered by blockchain. IPR­daily, which re­ports on in­tel­l­lec­tual prop­erty rights is­sues, said that Alibaba filed 49 blockchain-re­lated patent ap­pli­ca­tions world­wide in 2017 — more than all other com­pa­nies in the world.

“Blockchain is more suitable for busi­nesses that have al­ready gone on­line and been fully dig­i­tal­ized,” said Li Wei, CEO of Hyper­chain, a blockchain ser­vice com­pany es­tab­lished 2016 in Hangzhou.

“Blockchain tech­nol­ogy can make them ‘run’ faster.”

Hyper­chain has so far built an ex­ten­sive col­lab­o­ra­tion with banks, se­cu­ri­ties com­pa­nies and stock ex­changes in China. In Jan­uary 2017, the na­tion’s first blockchain-pow­ered dig­i­tal draft pay­ment plat­form was born in Hangzhou out of a col­lab­o­ra­tion be­tween the lo­cal Zhe­shang Bank and Hyper­chain.

The dig­i­tal plat­form im­proves ef­fi­ciency and blockchain tech­nol­ogy guards against fraud.

The two com­pa­nies have ex­tended their part­ner­ship and range in the past two years by ap­ply­ing the tech­nol­ogy to ac­counts re­ceiv­able and is­suance of se­cu­ri­ties.

Hangzhou’s govern­ment sup­port and strong tal­ent base cre­ate many en­tre­pre­neur­ial op­por­tu­ni­ties in the city.

One com­pany at the con­fer­ence was 19-month-old iPam­pas, founded by three for­mer Alibaba ex­ec­u­tives with more than 10 years’ ex­pe­ri­ence as se­nior tech­no­log­i­cal spe­cial­ists in big data, cloud com­put­ing and ar­ti­fi­cial in­tel­li­gence.

The founders are us­ing their ex­per­tise to help fi­nan­cial in­sti­tu­tions such as wealth man­age­ment firms and pri­vate eq­uity funds to eval­u­ate their clients more ef­fi­ciently and ac­cu­rately, and thus re­duce risks in le­gal or reg­u­la­tory-re­lated is­sues. The com­pany raised “tens of mil­lions of yuan” in a pre-A round fi­nanc­ing in April.

“I think Hangzhou has taken a first-mover ad­van­tage in the fin­tech in­dus­try. Peo­ple are pos­i­tive to­ward em­brac­ing new tech­nolo­gies. Also com­pa­nies like Ant Fi­nan­cial at­tract pro­fes­sion­als from all over the coun­try, and of­fer smaller com­pa­nies like us a steady sup­ply of tech peo­ple,” Wang Dingqian, vice pres­i­dent of the com­pany, told Shang­hai Daily.

Photo by IC

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