The Bankwatch

Tracking the consumer evolution of financial services

Ant Financial IPO

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Ray Dalio makes the point in todays FT that the West is blind to the rise of China and probably missed out on opportunities.

For as long as I can remember, people have said that China cannot succeed. Communism doesn’t work. Authoritarianism doesn’t work. The Chinese aren’t creative. They have a big problem with bad debts and property speculation. Yet every day we see China succeeding in exceptional ways.

Basically Ray makes the point that while we predict failure and worry about risks, China succeeds in exceptional ways.

Facts on China

The IPO paperwork registered in Hong Kong and just approved by China contains some fascinating insights. It is clear that China is a green field of consumer opportunity.

A second takeaway from the IPO is the creative simplify Ant brings to flow access to gigantic array of services.

Here are some elected screenshots from the IPO. There are some stunning statistics here which scream opportunity.

Ant is a complicated and large set of companies:

Payemts are at the centre of what Ant does:

Our Mission, Vision and Values

Ant’s origins date to 2004 when Alipay was created in the nascent days of e-commerce to solve the trust issue between buyers and sellers in online transactions. Our innovative payment solution bridged the trust gap, facilitated online transactions and underpinned the development of e-commerce in China.

Win-Win Partnership with Financial Institutions

We are a technology services company. We provide the platform and tools to allow partner financial institutions to serve underserved consumers and small businesses with inclusive financial services and empower them to better manage risk, efficiently handle underwriting and distribute their products. Our complementary partnership with financial institutions creates a sustainable win-win relationship based on trust.

In credit, we leverage our intelligent decisioning systems to originate loans which are then primarily underwritten by financial institutions. For these financial institutions, our technology and customer insights allow them to cost-effectively grow their loan book, while our dynamic risk management solutions maximise the efficiency and effectiveness of onboarding, underwriting and monitoring. Our approach is not to use our balance sheet or provide guarantees.

In investments, we operate the largest investment platform by AUM in China for consumers to shop for investment products, providing unparalleled reach to partner asset managers. This platform substantially lowers the cost of investment product distribution and ensures a superior user experience. Investment managers also value our AI capabilities on the platform, providing intelligent matching of investment products against investor’s risk tolerance, for it is critical to ensure product suitability and sustainable industry growth. We benefit from the product manufacturing capabilities of the investment companies who can provide a range of accessible products to our users, thereby strengthening users’ engagement on our Alipay app.

In insurance, we believe the industry is ripe for radical expansion in product offerings, because any activity with risk can be insured if sufficient data is available. Insurance companies benefit from our reach, unrivalled customer insights and product innovation capabilities, which have led to the creation of many scenario-based insurance products. We benefit from the underwriting capabilities of the insurance companies and the ability to work together in the development of innovative new products.

Market size – China

Market composition cash, credit – Asian and western peers

Breadth of Ant services

One simple app screen – online banking designers take careful note

Simplicity in Innovation- QR codes

Written by Colin Henderson

October 23, 2020 at 15:16

Posted in Uncategorized

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