KPMG China makes its first announcement today of 50 leading Fintech companies operating in China, and publishes a report illustrating KPMG’s understanding of the Fintech industry, its observations of trends in Fintech and a brief introduction of the companies on the list.
Over the past several months, KPMG China shortlisted 50 leading Fintech companies. These companies were selected by over 20 senior partners from KPMG international member firms and KPMG China with specialities in several fields including IT, data analytics, capital markets, risk control, business operation, finance and tax management, venture capital, and entrepreneurial guidance.
Fintech companies are non-traditional financial institutions that are using technology to disrupt the financial sector, using innovation and efficient technology to provide better financial services and risk management. Six criteria were used to evaluate shortlisted firms: (1) the application of advanced IT technologies and breakthroughs; (2) data collection, mining and execution driven by technology; (3) innovation in business structure and its disruption of traditional finance; (4) the ability to address current issues and improvement in financial efficiency; (5) valuation and recognition in the capital markets; and (6) development potential and future prospects. These six criteria cover the key factors in the Fintech sector.
The 50 leading Fintech companies in China are engaged in developing new technologies to push for the transformation of the financial services industry. They are proactively exploring and adopting advanced IT technology (such as big data, risk modelling, cloud computing and blockchain) to increase efficiency in financial services through disruptive innovation.
Simon Gleave, Asia Pacific Partner-in-charge, Financial Services, KPMG, says: “We are very pleased to see that these innovative companies are pushing forward China’s reform in the financial sector. A new ecology of the financial industry is taking shape and we believe these innovators will play important roles in a new generation of financial services.”
Arthur Wang, Head of China Banking, KPMG China, based in Beijing, says: “KPMG recognises that China is fast becoming one of the leading Fintech markets globally and an important innovation centre in the Fintech sector. The companies shortlisted were distinguished by their innovative business practices as well as their ability to develop technology-driven solutions for some of the biggest issues facing the financial services sector. The application of advanced technology is leading major breakthroughs in the financial services sector, for example risk quantification models, which have helped shorten the approval time for consumer loans, or big data, which is being harnessed to detect fraudulent behaviour more effectively.”
Among the 50 companies shortlisted, big data and data analytics are employed in some capacity by almost all of the companies, and over half of them indicate that big data and its application are their core technology, with mobile computing, machine learning and cloud services as their most popular technologies. The business activities of the companies listed are fairly diverse, ranging from big data and credit investigation, network lending, payment services, integrated financial services, online investment services and internet insurance.
Raymond Cheong, Partner, KPMG China, based in Beijing, says: “The future of consumer finance hinges on the ability of Fintech companies to leverage big data through customer profiling technology. This allows companies to provide more personalised credit services, improve scenario-specific services, and expand the pool of customers with access to better financial services to those that might traditionally have been excluded.”
James McKeogh, Partner, KPMG China, based in Hong Kong, says: “Many companies are attempting to leverage Fintech from the perspective of efficiency and innovation, with the aim of improving their existing processes and digital capabilities.”
He adds: “Fintech companies need to meet certain regulatory requirements and often need licences to operate. As a result, many Fintech companies are beginning to develop formal partnerships with licensed financial services institutions such as banks, securities companies and insurers.”
These relationships also stand to benefit traditional financial services institutions, for example by improving their customer services, optimising credit assessment processes or increasing their risk quantifying capabilities when working with companies that specialise in data modelling.
At the same time, Fintech companies are increasingly using mobile-based applications to record users’ behaviour, and to keep track of their interests. This allows financial services organisations to improve their client services in personal finance, investment and wealth management.
Raymond Cheong concludes: “Going forward, we expect to see more cooperation between Fintech and financial services firms, especially as regulatory policies in relation to internet finance become clearer. Being a bridge between traditional financial institutions and Fintech companies, KPMG will continue to engage in active research and exploration in the Fintech sector, and play a bigger role in leading and servicing the development of the new financial industry.”
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China Fintech 50 companies
*Companies are arranged in alphabetical order based on the first letter of their Chinese name in pinyin.
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In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG China was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong office can trace its origins to 1945. This early commitment to the China market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in the Chinese member firm’s appointment by some of China’s most prestigious companies.
Today, KPMG China has around 10,000 professionals working in 17 offices: Beijing, Beijing Zhongguancun, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Hangzhou, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Tianjin, Xiamen, Hong Kong SAR and Macau SAR. With a single management structure across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.