Across The Border | Conventional Chinese lenders yet to fully grasp the growing impact of fintech
Alibaba’s Ant Financial’s valuation is nearly on a par with Bank of Communications, the mainland’s fifth-largest lender, at US$60b
That financial technologies (fintech) can redraw the mainland’s banking landscape is old hat.
Yet, mainland banks still appear to be largely deaf to the message, according to global business advisors McKinsey’s.
Debates continue on whether such online financial service platforms will ever become genuine challengers to the country’s banking system, dominated by powerful state-owned lenders – but we are yet to see those mainland heavyweights truly setting their eyes on disruptive technologies that can help improve their performance, according to Joe Ngai, managing partner of McKinsey’s greater China office.
He says Chinese banks are lagging behind their Western counterparts in understanding the urgency of adopting information technologies and the merits of doing so.
Many conventional commercial lenders are now three to five years behind the internet-based financial service providers in terms of technological innovation in what Ngai described as “a serious issue” facing the mainland’s main banking sector, with total assets of about 240 trillion yuan (US$34.8 trillion).