WeBank is a top-5 online bank in China and plans to develop a world-class blockchain-based business ecosystem. (Photo: IC)
Annual reports from five major online banks revealed new market momentum in China. WeBank, Network Bank, Sichuan XWBank, Beijing Zhongguancun Bank, and Suning Bank showed positive gains with three of the banks doubling their total assets through digital platform models.
Within China’s banking sector, the five banks have paved a new way for funding and financing while promoting confidence in developing online businesses.
Traditional banks still face obstacles in developing their technological capabilities along with increased costs in manual processing. Investment remains committed to inclusive finance, while online banks have developed client groups using the latest FinTech systems.
Technology such as the mobile internet, big data mining, and artificial intelligence (AI) have acquired clients who may not have a credit history or sufficient collateral, thus expanding the scope of inclusive finance.
Sichuan XWBank is an online-only banking platform. Almost 80 percent of their clients are from third and fourth-tier cities and rural villages.
XWBank helped 2.83 million rural users through optical character recognition, so that famers could easily obtain production and living funds as private lending was their only option.
Through FinTech innovation, online banks have enabled macro and small credit businesses.
Online banks have replaced traditional processing with data-based risk control systems, reducing loan application periods by processing them in real time, and also offer faster bank audits.
One bank even offers credit approval results within seven seconds, while the average time for most online banks is roughly 40 seconds.
Online banks do not have office branches, nor do they have deposit or cash counters, which has helped this burgeoning sector more profitable.
Inspired by the success of online banks, traditional ones have strengthened their confidence in conducting business online and are starting to test the waters of online banking.
FinTech is trending and traditional banks are working on making the transformation through collaboration efforts between their businesses and advanced innovation techniques.
Online banking is changing the way people live and the Internet of Things has become the core force driving this global financial wave.