According tomedia reports, The recent boom in the flow of banking institutions to keep their businesses liquid through digital technology has been buoyed by the recent boom in the business of billionaire Jack Ma’s open banking strategy. Ant Financial said the number of customers paying to develop mobile apps and provide cloud computing capabilities increased by 175 per cent in the two months to April. It is currently working with more than 200 financial lenders, according to the company. During this period, the number of consultations that would like to work with Ant Financial also increased by 400%.
Ant Financial’s entry into the banking sector as a “disruptor” is a wake-up call for many of China’s 4,500 banks. About two years ago, Ant Financial also expanded its strategy of selling services to banks. While the industry’s response has been less enthusiastic, smaller regional banks have recently gained more momentum to work together.
“The big banks may want to build their own private cloud, but our goal is for small banks that may not have the budget to build the entire online infrastructure from scratch,” Liu Xin, head of cloud operations at Ant Financial, said in an interview. “
For Ant Financial, the strategy to open up the banking sector is crucial. In addition to selling technology to banks, it has a consumer lending platform that launched the Online Merchants Bank. It is reported that this year, the Bank of China has issued 2 trillion yuan in loans. According to a person familiar with the matter, 65 per cent of Ant Financial’s revenue will come from these services by 2021, up from about 35 per cent in 2017.
One of the financial institutions working with Ant Financial is the Shenzhen Rural Commercial Bank. With the help of Ant Financial, Shenzhen Rural Commercial Bank is able to handle online transfers, check investment details and buy wealth management products with its 15 million retail customers. Ant Financial reduced the loading time of the bank’s application shorter than half a second at peak usage. The bank said almost all of the transactions in February were done online.
“While we have always put mobile development first, the growing demand from our customers has made us realize that our existing infrastructure is not enough,” said Zhan Bin, head of network finance at Shenzhen Rural Commercial Bank.
The financial institution still stores most of its data on its own private cloud, but it uses Ant Financial’s public cloud to provide customers with quick and easy payment services. Shenzhen Rural Commercial Bank also plans to integrate Ant Financial’s Alipay mini-program infrastructure to allow users to access entertainment, dining, movie tickets and travel services without leaving Alipay. In return, bank customers receive discounts and cumulative bonus points.
The bank pays Ant Financial a one-time licensing fee to purchase cloud products such as mPaaS and SOFAStack, in addition to the annual fee for software support and maintenance. The Shenzhen Rural Commercial Bank declined to say how much it would pay Ant Financial.
“The key to persuading more banks to use our technology is to prove that we can help them solve their problems,” says Liu Xin of Ant Financial.