China’s fintech giants led by Ant Group retool and innovate, as they roll with the punches in new regulatory landscape

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Lufax, 360 Digitech, LexinFintech, FinVolution lower interest rates at buy-now, pay-later units; Ant Group says will comply with rules without revealing details

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Alison Tudor-AckroydandEnoch Yiu

Published: 8:30am, 18 Dec 2020Updated: 3:36pm, 18 Dec 2020

This final instalment in a five-part series on the future of China’s fintech industry looks at what the largest fintech companies must do to survive and thrive in a harsher regulatory landscape. Earlier instalments are here.

When Ant Group’s executive chairman finally broke his silence this week, nearly two months after the largest stock sale in history blew up, his choice of words at a seminar in China were more akin to the speech of a state-appointed banker than a technology entrepreneur out to disrupt the financial industry.

Ant Group, which grew into a US$350 billion company while still in its teens, has “spared no efforts” in studying the government’s latest five-year economic plan, and “policy insights into financial security and financial stability,” according to a translation of the speech by executive chairman Eric Jing, delivered in Mandarin Chinese.

Jing’s conciliatory tone contrasts sharply with the more strident speech in late October by Ant Group’s founder Jack Ma, and shows regulators have placed firm guardrails on the blistering growth in the world’s largest market for financial technology, or fintech. As regulators finally catch up with the revolution going on around them, fintech companies will have to reach deep into their tool bags for innovative new products and re-engineer themselves to survive and thrive in a harsher environment.

On Friday, Ant Group removed internet-deposit products offered by banks from the shelves of its virtual financial market place as it sought to assuage regulators’ fear of small and regional banks slipping under their radar by marketing on digital platforms.

03:04

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Ant Group’s smaller peers are also adapting to the torrent of new rules since August, designed to bring the swashbuckling Chinese fintech sector to heel. Profits of Wall Street-listed Chinese fintech firms – Lufax, 360 Digitech, LexinFintech Holdings and Finvolution – rose in the third quarter even after Beijing lowered the boom on outsize interest rates in the industry.

SCMP Series

Redefining fintech

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