China's leaders in fintech: 2018
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China's leaders in fintech: 2018

In Chinese banking, government-owned doesn’t always mean stodgy and slow to innovate. State-owned banks across the country are absorbing fintech into traditional models to meet surging consumer demand for sharper financial tools. Here’s a few that we've liked this year.


Best national bank: China Merchants Bank

Few other national commercial banks in China have demonstrated such a strong commitment to transforming their services with fintech, or made such rapid progress on that front as China Merchants Bank.

CMB is recognized by its peers as the leader when it comes to deploying cloud computing, big-data analysis and artificial intelligence in product development and risk management. 

Take, for example, the mobile phone applications that the bank has developed: these feature facial, fingerprint and voiceprint recognition, as well as robot advisory and risk control. They even offer augmented reality.

Its CMB Life App, a fintech-empowered mobile phone application for retail customers, had more than 30 million active users at the end of June, up 35.6% from a year earlier. 

Yet the bank’s leaders are not satisfied. After announcing the goal of transforming CMB into a fintech bank in 2017, the bank’s president, Tian Huiyu, is now leading a newly created unit known as the fintech committee to coordinate and advance the transformation.

While its peers rely on external partners to support fintech application, CMB has gone further by encouraging innovation from its own staff. 


Kunde Chen

At the beginning of 2018, CMB, for whom Kunde Chen is chief information officer, raised its annual budget for incubating its own fintech projects to 1% of its operating income in the previous year, an increase from 1% of pre-tax profit previously.

It has also encouraged employees across its business units to team up on product innovation. By the end of June, more than 80 such teams had been established within the bank to experiment in fintech product development.

CMB has stepped up recruitment of technology talent in recent years and has partnered with top-tier universities, both in China and abroad, to unlock the potential of fintech to optimize its operations and services. 

To date, the bank has joined Jiaotong and Tsinghua universities in China, as well as Stanford University, to conduct AI-related research and development for banking operations. 


Best regional bank: Bank of Nanjing

Established in 1996 in Nanjing – the capital of Jiangsu province, in eastern China – Bank of Nanjing has shown robust growth over the years to become the fourth-largest regional commercial bank in China by assets as well as revenue in the first half of 2018.

It also stands out among regional domestic commercial banks because of its enthusiastic embrace of fintech through its partnerships with domestic internet firms and because of the active role it has played in helping smaller banks to access fintech by sharing its cloud computing platform with them.

In October, Bank of Nanjing signed a strategic agreement with Baidu to collaborate in applying big-data analysis and artificial intelligence for precision marketing and risk management. 

Baidu is the third big internet company that the bank has partnered with to date. 

In November 2017, the bank launched Xinyun+, a cloud computing platform it had developed with Alibaba and the e-commerce firm’s financial services unit, Ant Finance. The following February, Nanjing struck a deal with the financial services unit of to make its electronic banking services easily accessible to’s e-commerce customers.

By leveraging the technology strengths of domestic internet companies, Bank of Nanjing has improved the efficiency of its operations. For example, by the end of October, barely one year after it came online, Xinyun+ had helped the bank to attract more than 6.52 million new customers for consumer loans by speeding up the processing of online lending applications. 

The platform has also enabled the bank to quickly roll out new products in areas such as asset securitization, asset management and structured deposits.

Bank of Nanjing has also taken the initiative to develop a shared financial ecosystem with small banks in China who are technologically weak, by connecting their IT systems to the Xinyun+ platform. As of October, 18 city and rural commercial banks were connected. 

Such a partnership has also made it easy for Bank of Nanjing to form consortia with domestic peers to lend to small and medium-sized enterprises across China.  


Best IT infrastructure partner: Hundsun Technologies

Hundsun Technologies is a leading IT system provider for a wide range of financial institutions in China. By increasing investment in R&D, the company has maintained rapid business growth and has led its peers in exploring the use of fintech to upgrade products and help clients meet fast-changing regulatory requirements in China.


Liu Shufeng

By market share, Hundsun, led and co-founded by Liu Shufeng, is the largest domestic specialized IT system supplier for financial institutions and investment companies. 

Around 75% of Chinese banks now use its IT systems for asset management; about 90% of trust firms and fund management companies have opted for its systems in wealth management, and more than half of all domestic securities brokerages have adopted its systems for securities trading.

Despite a slowing Chinese economy and the downturn of the domestic stock market, Shanghai-listed Hundsun’s net profit rose more than 24% over the first three quarters of 2018, compared with the same period the year before. Revenue increased nearly 19%.

Behind the company’s business growth is its sustained investment in technologies. Hundsun invests nearly half of its operating revenue in R&D, and much of that has been allocated for fintech-related projects.

Hundsun has begun using blockchain technology to help banking clients manage risks in trade and supply-chain finance. 

Earlier this year, it began developing a new generation platform-as-a-service (PaaS) cloud platform to upgrade the underlying architecture for its IT systems. It also launched an AI-enabled smart investment advisory system to help small and medium-sized commercial banks in China to provide tailor-made asset investment plans for their customers.

Compared with domestic competitors, Hundsun also has a clear competitive advantage – namely the backing of Chinese e-commerce firm Alibaba. In 2014, Alibaba acquired a 20.7% interest in Hundsun. Because of the deal, Hundsun has already rolled out IT systems with Ant Finance, Alibaba’s financial services unit, using big-data analysis to manage risks for auto-financing providers in China. 


Best risk management partner: Tongdun Technology

China has plenty of startups offering credit risk management and anti-fraud services, but few can match Tongdun’s rapid business growth and high level of recognition.

Established in 2013 in the eastern Chinese city of Hangzhou, Tongdun now serves more than 10,000 clients nationwide. It is widely regarded as one of the three largest, specialized intelligent risk-management and anti-fraud solution providers in China.


Jiang Tao

Tongdun, co-founded by Jiang Tao, has achieved by deploying big-data analysis and artificial intelligence to develop tailor-made risk management solutions.

Take the Chinese banking sector, where Tongdun has attracted more than 200 clients. The company’s services are badly needed by the numerous small and medium-sized banks to improve their online lending practices. 

These banks lack the ability to develop risk-management systems of their own, usually relying on ready-made systems obtained from external suppliers that may not fit their needs exactly.

What Tongdun has done is to work alongside these banks to develop an automated system with big-data analysis and AI. The system produces a score card for the credit status of each loan applicant by analyzing their records in e-commerce transactions as a proxy assessment of their ability to pay. 

The system can also propose the size of the loan as well as the interest rate appropriate for each approved loan application based on its own risk pricing model. After a loan is made, the system allows the bank to track changes in the credit status of their existing customers.

Tongdun has also introduced customized credit risk management and anti-fraud solutions for clients in other sectors. As a result, it has developed a highly diverse customer base that includes banks, insurance companies, independent payment companies, e-commerce platforms, online travel agencies, online gaming providers and social community websites.