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Ping An: Leveraging fintech for small and micro businesses

Supporting small and medium-sized financial businesses is one way larger institutions can both enable technical transformation across the sector and serve small and micro-enterprises more efficiently, according to the boss of Ping An Insurance Company of China.

Ping An has revealed how, speaking at the Lujiazui Forum in Shanghai in June, the group’s president and co-chief executive Yonglin Xie (pictured) had explained that small and medium-sized financial institutions were unlikely to have the financial resources or the research and development capabilities to develop their own technologies.

The insight follows the UN’s recent announcement it is seeking to harness digitalisation to finance the Sustainable Development Goals. Its report identified digitally-enabled SME lending as one of five ‘catalytic opportunities’ to accelerate the goals.

Developing tech capabilities

Xie said that leading enterprises needed “highly professional, applicable and stable fintech capabilities”, as well as “modular and scalable” capabilities in order to empower small and medium-sized financial firms. As an example, he cited OneConnect Financial Technology, a subsidiary of Ping An, and a technology-as-a-service platform for financial institutions in China.

As of the end of June 2020, OneConnect had facilitated two trillion transactions for customers of other financial institutions, including 171.5 million anti-fraud checks and 5.2 billion credit risk assessments. It also served 100% of major banks, 99% of city commercial banks and 53% of insurance companies in China, collectively reaching hundreds of millions of end-customers, according to Ping An.

To extend technological progress to the broader industry, leading financial institutions, such as banks and insurance companies, first needed to develop technologies, including artificial intelligence, blockchain and big data, themselves and enhance their core financial businesses, Xie said.

He went on to identify “two vital conditions for self-developed technological capabilities”, adding: “First, sustained and significant investment in technology by the large financial institutions is required. Second, the research and development and application of technology are highly dependent on a wealth of financial scenarios, requiring constant trial and error and continuous iteration.”

Ping An Group has invested more than RMB100bn (€12.37bn) in technology in the past 10 years and plans to invest RMB100bn in the next five years, the company said.

Zurich Insurance Group announced last week it would accelerate the development of its digital services. As part of this, it added, Ping An Technology chief executive Ericson Chan would take up the position of group chief information and digital officer in October to speed up the insurer’s digital transformation and develop technology solutions.

Elena Johansson

Senior Reporter

Part of the Bonhill Group.