Chinese e-commerce titan Alibaba’s finance arm today unveiled a smartphone app that lets users buy into hundreds of Chinese funds, as the company continues the push to become the country’s dominant online financial services provider. The rules may force Ant and some of its peers that straddle at least two financial industries to obtain licenses from China’s central bank and meet minimum capital requirements for the first time. Similar to Paypal, Alipay processes payments between any two users, whether they’re shoppers and small businesses, roommates, or street performers and commuters. . The app works with Nasdaq to provide real-time data on all U.S.-traded equities as well. The key to Ant’s growth lies in its platform business model. Nio, Xpeng, Li Auto: your cheat sheet to China's listed Tesla rivals, UPDATED: Ant Group IPO delay and Jack Ma's ill-timed speech, Reports of Huobi COO arrest spurs whale transactions as token sinks, Binance in trouble, blockchain security standard: Blockheads, Ant Group: Shanghai bourse halts mega IPO process, Trump backs off Ant Group blacklisting: report, Meituan mulls second IPO, Alibaba inks Farfetch deal: Retailheads, UPDATED: Ant Group IPO delay and Jack Ma’s ill-timed speech, Proudly powered by Newspack by Automattic. With Caifu Hao, third parties will be able to sell their own products to users directly and publish content on the app. Yuan said in the statement the company is planning to bring fund products from Hong Kong, so investors can indirectly tap global markets. Ant’s most recent valuation came in at $150 billion, compared to Goldman Sach’s $99 billion. In a cross-selling move that is as old as business itself, Ant Financial also offers other financial services through ecosystems for insurance, credit, loans, credit scoring, and wealth management to that captive audience. Yue Bao, Chinese for ‘leftover treasures,’ is Ant’s money market fund. For example, we’ve recently written about the benefit of. Most importantly, the platform’s algorithm recommends funds based on each user’s financial profile and goals, thereby closing financial literacy gaps that in the past may have prevented many users from investing. Most importantly, whether a user choose a third-party financier on Ant Fortune or opts for Yue Bao, that user remains within Ant’s financial and data ecosystem. The draft regulations have triggered an online backlash with critics saying the central bank is stifling innovation and protecting the interest of state-owned banks, which have long lobbied for stricter rules against Internet-payment companies as they face tougher competition from the likes of Alipay. This model starts with Alipay. Sign up to join over 20,000 other subscribers and receive the latest in platform news and insights. Become a platform expert – sign up for our newsletter now! I contribute to Forbes, and previously I freelanced for SCMP and Nikkei. A platform approach strengthened by a traditional financial institution’s customer base and resources will result in a potent combination that even Ant may find hard to match. Users will also be able to invest in Ant Financial’s money-market fund Yu’E Bao and buy products from Zhao Cai Bao, an online platform connecting small businesses and individual borrowers with investors. You may opt-out by. to both financial intermediaries and consumers. Ant Fortune will also help push their products to targeted users, according to the company. In a country where most large financial institutions are owned or controlled by the government, Ant’s success is unusual. That Ant offers both platform (Ant Fortune) and linear (Yue Bao) asset management services suggests that the platform transactions yield a large enough margin to justify Ant’s continued investment in it. The app currently works as a retailer that features and sells selected financial products from its sister companies or third-party financial institutions. An account could be opened for as little as 1 yuan ($0.15). It’s important to note that the platforms cross-sell services across Ant’s ecosystem, thereby all but ensuring that each new venture will have the user base necessary to attract third-party financial institutions onto the market. Launched in August 2015, the app – part of Ant Financial, an affiliate of e-commerce giant Alibaba – now has some 25 million active users. It will later open to various financial institutions including banks, insurance companies, and securities firms, according to Ant Financial. It’s also exporting its model abroad throughout Asia. This model starts with Alipay. It’s linear micro and SME lending arm was taking on riskier loans and passing on the risk by selling the loans through asset-backed securities. The key is the platform mindset that underlies everything Ant does. All Rights Reserved, This is a BETA experience. Given that banks typically reject the majority of potential borrowers, this marketplace approach gives them a way to retain the customer relationship while also bringing new customers into the financial services ecosystem. Email: firstname.lastname@example.org Twitter: @yueyueyuewang, © 2020 Forbes Media LLC. The app works with Nasdaq to provide … Stay in touch! Ant’s size have made it an important entity in the Chinese financial industry, and yet Ant is not licensed as a bank. It combines this platform approach in everything from payments and lending to insurance and investing with its linear microlending and microinvesting. model. EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change. Platform Innovation | Topics: Enterprise Hacks brings the community of corporate innovators together to beat big tech at its own game. Ant, an affiliate of Alibaba Group, is now 50% bigger than Goldman Sachs. They could also, of course, choose to invest in any fund listed on Ant Fortune. Thus it’s not surprising that the Chinese government plans to implement new financial regulations to oversee large fintech companies. Similar to Paypal, Alipay processes payments between any two users, whether they’re shoppers and small businesses, roommates, or street performers and commuters. It will be accessible by selected users in the initial launch phase. The Caifu Hao system is expected to go live in June and the first batch will include several mutual fund companies. It is now the largest money market fund in the world at $251 billion. It also owns and operates an open insurance marketplace with over 80 insurance companies on the platform that reaches over 400 million users. Get instant access to all our premium content, archives, newsletters, and online community. to create a financial services ecosystem of unparalleled breadth. The Investment Personality Test, developed by Schroders* and customised for Chinese investors by Ant Fortune, is accessible via their mobile Wealth Management platform and available through the Alipay app, a major payment and lifestyle platform. In 2017, the Chinese government required money market managers to set aside. Instead it’s shifting toward opening up its platforms more to larger financial institutions. Prior to Beijing, I spent six, I am a Beijing-based writer covering China's technology sector. I write about interesting Chinese companies. In the first quarter of 2017, Ant’s ABS volume dropped by 65%. Ant, an affiliate of Alibaba Group, is now. Ant’s most recent valuation came in at $150 billion, compared to Goldman Sach’s $99 billion. In the first quarter of 2017, Ant’s ABS volume dropped by 65%. “Ant Fortune aims to provide investment options for those who are left out by the current wealth management products by lowering the entry threshold, and for those who have little time or ‘know-how’ to grow wealth,” Leiming Yuan, general manager of Ant Financial’s wealth management unit, said in a statement. As a lending platform owner, a bank would have right of first refusal on any loan, and then refer rejected clients to a marketplace where borrowers can shop for the best lender. B2B Chemical Marketplaces and Tech Startups: Landscape and State of the Industry, Platform Business Model – Definition | What is it? The world’s largest fintech company, China’s Ant Group, will try to raise nearly $35 billion in a massive public offering of stock that would shatter records. The wealth-management app, Ant Fortune, offers 900 products from more than 80 Chinese fund institutions without charging commission fees, according to an Ant Financial statement. The admin dashboard for Caifu Hao owners provides data analysis and customer relation management tools. Yue Bao made investing in a money market fund easy for consumers. . In a country where most large financial institutions are owned or controlled by the government, Ant’s success is unusual. That’s just one example. While some may say Ant Financial operates in a larger market, and therefore larger scale is to be expected, this doesn’t explain Ant’s runaway growth within the Chinese market that has long-standing banks gnashing their teeth. Ant’s size have made it an important entity in the Chinese financial industry, and yet Ant is not licensed as a bank. We’re constantly updating our feeds with the latest platform news and Applico announcements. Ant Group (Chinese: 蚂蚁集团; pinyin: Mǎyǐ jítuán), formerly known as Ant Financial and Alipay, is an affiliate company of the Chinese Alibaba Group.Ant Group is the world's highest-valued FinTech company, and most valuable unicorn company.In October 2020, Ant Group was set to raise US$34.5 billion in the world's largest IPO at the time, valuing the company at US$313 billion. For companies suddenly faced with the prospect of competing against Ant Financial, the recipe for success is to combine the best aspects of Ant’s model with what traditional financial institutions already do well. Today, it’s one of the largest financial institutions in the world. Alipay has over 700M active users and completed over $8 trillion in transactions in 2017. According to a report from Reuters, Ant’s revenue is shifting away from offering traditional financial services and more toward facilitating third party financial institutions.
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