China’s Internet giant Baidu acquires a license for selling funds as an agency, announced by the China Securities Regulatory Commission on Wednesday.
The move signifies that Baidu has joined the fierce competition in the funds-selling business against banks and other Internet platforms.
As of 2017, 107 institutions were get permitted to sell funds in China. China has tightend the examination and approval process for funds selling licenses since 2017 after 107 institutions were permitted to do so.
Alibaba, Tencent, and JD.com, another three China’s online giants, have acquired the same license ahead of Baidu.
Leveraged by Baidu’s customer base and AI technologies, the company is ramping up its efforts in the fund selling business.
Baidu’s AI technologies could be utilized in the fund selling services where it can recognize customized products for an appropriate group of customers accurately and automatically, said analysts, and this will appeal to fund firms as it improves the customer experience and the sales volume.
It is not the first time for Internet companies to use AI in the fund selling services.
The AI technologies of Ant Financial, Alibaba’s finance arm, has improved its fund selling effectiveness by 70 percent and cut the cost by 50 percent, said the company.
Some analysts believed that China’s stock markets have been at the bottoming out stage which means that there is significant room for an appreciation in funds and, with a large customer base, Baidu’s customers are likely to closely attach to the company ultimately.
The main force for selling funds as proxies have been slowly shifted from traditional banks to online platforms.
The market share of banks in fund selling once accounted for over 90 percent. But -Internet platforms nowadays have one-third of the market share.
Analysts noted that institutional investors are increasing in China’s stock markets and they will bring new opportunities in the future.