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Chinese fintech firm coasts on BRI, wants to power more international lenders

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Pedestrians walk through the Times Square while a digital advertisement of OneConnect appears on giant screens in New York. China Daily/ANN

Chinese fintech firm coasts on BRI, wants to power more international lenders

New York-listed OneConnect Financial Technology Co Ltd, the fintech arm of Ping An Insurance (Group) Company of China Ltd, is coasting on the Belt and Road Initiative (BRI) to expand its overseas layout.

In doing so, it is meeting the financing needs of local companies in the markets it operates in, it said.

OneConnect’s overseas business currently spans 15 countries and regions, including Singapore, Thailand, Indonesia, the Philippines, South Korea, Japan, and Germany. It is constantly expanding into BRI-related economies.

Ping An Group co-CEO Jessica Tan said: “The reason why our fintech was able to cover more than a dozen countries and regions in 18 months is that we don’t compete for customers with local enterprises.

“Instead, we export fintech. We have over 10 years of experience in fintech. We would like to help local enterprises increase their efficiency and lower costs.”

As an active enabler of the BRI, OneConnect serves local companies across East Asia, Southeast Asia, the Middle East and Europe, Tan said. It endeavours to support key areas related to the initiative, including facility connectivity, unimpeded trade, and financial integration.

In July, OneConnect signed an agreement with the Abu Dhabi Global Market in the UAE to develop technologies such as artificial intelligence, blockchain, and distributed ledger. In June, it tied up with UBX, a subsidiary of Union Bank in the Philippines, to build the country’s first blockchain-enabled technology platform.

The technology platform offers services, including AI analysis, remote review, and anti-fraud scrutiny, to meet local enterprises’ digital-age needs like multi-channel loan application processing, credit evaluation, loan appropriation and customer identity verification.

In addition, it can effectively reduce credit approval time, and provide more accurate risk assessment, OneConnect executives said.

OneConnect Southeast Asia CEO Bin Ru Tan said: “Banks and insurance companies recognise that digital adoption is here to stay and now is an opportune time to accelerate digitalisation.

“We are seeing strong demand for our smart interview, digital banking, and smart lending solutions as they support a truly seamless remote banking experience.

“Having grown our footprint across Southeast Asia, today we have amassed extensive domain knowledge when it comes to understanding the local financial landscape and regulations.

“We have successfully collaborated with top financial institutions and leading third-party service providers to build end-to-end digital solutions and ecosystems that are highly relevant to the local markets.”

Wang Penghu, general manager of the company finance department of China Citic Bank Corp Ltd, said the banks’ digital transformation makes inclusive finance possible. Digitalisation also contributes to precise marketing, and lowers the banks’ customer acquisition service costs, he said.

A report from accounting firm EY (previously Ernst & Young) showed that 85 per cent of the banks around the world have made digital transformation the focus of their future work.

OneConnect has helped financial institutions make the required digital transformation, it said. In China, the company has served all of the country’s major banks in less than four years. And 99 per cent of the country’s city commercial banks, and 52 per cent of insurance companies, have been empowered with digital transformation. Outside China, OneConnect is making similar inroads into the global financial services industry.

Bin Ru Tan said: “OneConnect is able to make contributions to the advancement of the financial services industry in Asia, and even the world. We are confident that we can make even more significant contributions, going forward.”

OneConnect’s overseas expansion began in Southeast Asia, it said. The region is home to a rapidly rising middle-income class as well as an ever-growing number of internet users. But, modern financial infrastructure is conspicuous by its absence.

For instance, it added, bank card and bank account penetration rates in the region are low. Only a few people of the overall population use credit cards. The credit reporting system is weak. Many people still rely on cash.

OneConnect said it hopes to introduce Chinese experience and fintech expertise to the region, to quickly bridge the financial services gap and increase the penetration rate of inclusive finance.

Currently, in Thailand, three of the top 10 banks are served by OneConnect, while in Cambodia, Malaysia, Indonesia, Vietnam and the Philippines, OneConnect has made inroads into the local markets by establishing subsidiaries or working with local enterprises.

Bin Ru Tan said: “Using our smart finance platform, we included over 70 per cent of the small and micro enterprises in the supply chain credit system, greatly increasing their financing possibilities.

“The fintech solution, which has already proved effective in China, unlocks the vitality of small and micro enterprises in Southeast Asia and boosts the economic development of the countries in the region.

On the New York Stock Exchange, OneConnect’s (OCFT) share price gained $0.56 or 2.55 per cent to close at $22.56 on Friday for a market capitalisation of $8.798 billion, with 335,917 shares traded.

CHINA DAILY/ASIA NEWS NETWORK

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