Home Technology Four fintech trends transforming finance in China

Four fintech trends transforming finance in China

by Mark Hedley
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Financial services are digitally transforming the way Chinese citizens use their money at home and abroad. As regulations continue to open up to the rest of the world, key services and technologies have emerged that present unique opportunities. From cloud infrastructure to mobile platforms British companies are adapting to China’s growing fintech ecosystem, writes Susanne Chishti, CEO of FINTECH Circle



Chinese leader Xi Jinping announced last month that blockchain was “an important breakthrough” and that China would “seize the opportunity” whilst detailing how the Chinese government would support blockchain research and standardisation. This is the first time a major world leader has issued such a strong endorsement of blockchain.

This comes at a time when the country prepares to launch a national digital currency following a ban in 2017 on all cryptocurrency exchanges that prevented the purchase of digital currencies with Chinese RMB. More recently government authorities in Shanghai and China’s Central Bank have formed a blockchain alliance to improve trade finance operations.

As regulation authorities around the world prepare for Facebook’s proposed cryptocurrency Libra, the Chinese government and Central Bank are taking control of what may become the world’s first national digital currency. If successful, the standardisation could influence future blockchain projects across the world.

Mobile first

The mass adoption of mobile payments has paved the way for a tech literate population, with many leapfrogging the banking system to access financial services. As with some fintech challengers in the UK, mobile first is becoming mobile only.

Altogether mobile transactions in China will total over $9 trillion a year. China has the world’s largest ecommerce market with 80 percent of e-commerce transactions being mobile. Over 55 percent of Chinese consumers have made a mobile payment compared to only 19 percent in the USA.

The WeChat mobile super-app plays a key role in the daily lives of Chinese consumers providing services such as social media, transport and news with WeChat Pay as one of the most popular payment methods. For UK fintechs integrating into the messaging app’s billion plus user ecosystem there are a significant number of challenges and opportunities.

Regulators are easing restrictions, and this is enabling fintech platforms such as Alipay and WeChat Pay to open their platforms to visiting foreigners without local accounts. Alipay said it’s letting travellers use a prepaid card service while WeChat Pay will let users connect their existing cards.

The Chinese government and Central Bank are taking control of what may become the world’s first national digital currency


Cloud computing

Cloud computing


Cloud services based in China are now becoming available to the rest of the world. Having digital products physically located in data centres in mainland China means that the Great Firewall will be less of a hurdle and content and services will reach Chinese consumers quicker.

In the age of digital transformation, cloud infrastructure also enables companies to turn data into actionable insight. Cloud services in China offer Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) solutions to overseas fintech partners who want to make their services available to Chinese customers.

For highly regulated industries such as finance, cloud companies can be valuable local partners who can guide foreign organisations through the regulatory and technical challenges of moving into new territories. Amazon and Microsoft both have a presence with AWS and Azure, however domestic cloud services dominate China’s market.

According to a report by Canalys, Alibaba Cloud is the largest player in China with 43 percent market share. Meanwhile Tencent has less than 20 percent market share and AWS and Baidu are both on less than 10 percent. Chinese cloud service providers are also looking to the UK as Alibaba Cloud – with data centres in London – recently partnered with their first UK distributor.


The macro trend of financial regulation opening in Europe is also being seen in China with fintech startups, banks and money transfer companies competing to meet the growing demand for sending money overseas. East Asia and Pacific remittances increased by almost 7 percent to $143 billion in 2018 with China having the second highest remittance rates after India.

Fintech has helped bring down payment costs and the time it takes to transfer money across borders. One of the most common uses for Bitcoin in China has been reported to be remittances using companies like Hong Kong’s Bitspark.

Initiatives taken by governments are opening up China to European fintech innovators taking a technology first approach. Regulatory bridges are also being forged through partnerships and understanding for a more connected global fintech ecosystem.

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