In case you didn’t notice, this week was the week of the #SingaporeFinTechFestival. Although I was in Asia last week, this week I’ve been invited to be in America and so could not attend. Nevertheless, my good friends at Ant Group have been there and made some major announcements
A good example is this one, where the company announces that, just a few years after launch, Alipay+ now connects 88 million merchants worldwide to 1.5 billion users of over 25 e-wallets. The company never does anything small, even though they are perfectly ant-sized.
Anyways, the latest news is that MYbank, their digital bank in China, has matured nicely, and so a friend asked me to give a view on what’s been happening. In an interview with him, here is our conversation:
What are your views on digital banking, and what major benefits do you see in its evolution?
I see digital banking as a next generation version of banking. It is as different as print media is to digital media. It is a new generation of banking. The thing is that, as with media, the old brands have a huge footprint and legacy they bring to bear. We don’t drop the BBC or CNBC, just because the internet has arrived. But, equally, we now pay as much attention to Facebook and TikTok. It is new, social media. The same has happened in banking. We may bank with a good old, trusted brand, but the new digital challengers are equally taking market space. There is room for both.
Which MYbank solution(s) impress you most, and how do they showcase the importance of intelligent transformation and innovative technologies in the financial/ banking industry?
Well, first and foremost, we need to position MYbank. MYbank is a bank for small businesses in China. It’s not for anyone and everyone. In that positioning, it is phenomenal. As already mentioned, it is serving almost 90 million merchants and providing them with loans, credit lines and banking services that have been previously hard to find. It is revolutionising the commercial space.
During SFF, the bank has now opened a whole range of new services from SME owners being able to secure collateral-free business loans with just a few clicks on their mobile phones (the 310 Lending Model) to rural farmers being able to get loan in a few minutes using their app (the Tomtit system).
But it goes further and deeper than this.
For example, the Goose digital supply chain finance system uses a variety of new technologies – such as graph computing, multimodal recognition, blockchain, and privacy-preserving computation – to provide financial support to small businesses. These are technologies that make me go Wow! to even comprehend them, and I’ve never seen anything like it anywhere else.
How is SME financing in your region, and do any MYbank solutions seem inspiring for local banking or SME financing?
Well, as mentioned, the innovations that Ant are bringing to market are way byoned what I’ve seen elsewhere. Sure, we have SME focused financial companies in many markets, but I cannot think of one that goes as far and deep as Ant. What Ant Group is doing for SMEs is the same as the revolution of consumer retail banking and payments that you guys did over the past two decades. It is reinventing thinking. And the example I always use when talking with European and American banks is that your company reinvents its systems architecture every three or four years. Most European and American banks might reinvent theirs every thirty or forty years … if ever.
What's your take on the future of digital banking? Any specific trends you foresee shaping the industry?
The biggest change right now is Generative AI, artificial intelligence. We’ve all seen the impact of ChatGPT, but what if you integrated AI into every financial transaction. Instead of visualisation of your personal finances, you would have intelligence about them. My latest tagline is that you no longer need to think about money because money thinks for you. I love that idea, with the concept being that everything can be delegated. Why do we stress about money? Because we don’t know how to handle it. What if we could just get the system to tackle the stress for us? Wouldn’t the world be a better place?
Can you share your first reaction after seeing the MYbank cases. Or what you can relate to either personally or something happening in your market?
Well, as you know, I am a fan of Ant and your technological innovations. I guess one that really stood our for me is Lark. In the case study, you give this detail:
Li Hua, a truck driver, submitted his loan request through the Lark system’s interactive program. Within seconds, he received a prompt: “What is the brand and model of your vehicle?” Li Hua stepped out of his truck, took a photo, and uploaded it. Another question followed: “What are you transporting?” Li Hua provided details, including pictures of the goods being transported. Thirty minutes later, Li Hua received a notification confirming a successful increase in his credit line at MYbank.
It's a great example of letting the system take the stress. You don’t have to worry about how it is done, the system does it for you. Lark, described as an “AI-driven conversational risk control system” – I love that word conversational – does everything for you. You just talk to the system. This is something I wish was being replicated worldwide and, one day soon, I’m sure it will be.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...