China has long been a leader in using technology in the financial sector. What developments are you observing now?

China strongly encourages financial institutions to embrace and invest in fintech while discouraging tech companies from acting as financial firms. Banks are urged to develop in-house technologies and support startups to internalize these capabilities. The nation is highly focused on advancing science and technology, with even traditionally less tech-savvy banks, like the lesser-known Industrial Bank, now employing thousands of staff in the tech sector.

What role will fintech play in the future financial system?

China is comprehensively reconfiguring its financial system, emphasizing science, technology, inclusive finance, retirement finance, and green finance. The aim is to establish a "people's finance" system that prioritizes the public interest. Unlike in the US, where Wall Street lobbying can obstruct such efforts, China maintains a more coherent approach. China seeks to strike a balance, with fintech playing a pivotal role in this transformation.

However, the financial system struggles to effectively channel short-term savings into longer-term investments.

Near ZIBS is the headquarter of Ant Group, the company behind the payment provider Alipay. How is it positioning itself for the future?

Ant Group, marking its 10th anniversary, has boldly restructured by creating three distinct subsidiaries in addition to its financial services business: international operations, the database section OceanBase, and digital technologies. This strategic move caters to the diverse business models and the shifting regulatory landscape. The technology arm is vital for China's self-sufficiency and national security in finance, while the financial services business collaborates with financial institutions, offering services like credit analysis for smaller banks. And the global subsidiary, with its management based in Singapore, seeks to drive digitalization in emerging markets, harnessing Alipay's user base of 1 billion customers and its wide-ranging capabilities.

Ant Group offers a "financial supermarket" with all types of services in one app. Why doesn't this exist in the West?

The West has explored the financial supermarket concept, with companies like Citi attempting to create one, but at that time, maybe technological limitations hindered success. In China, Alipay has become an integral part of the country's infrastructure, enabling users to access a wide array of services. However, this comes with immense responsibility and obligation to the public. Ant Group has acknowledged this and is tackling data privacy and ethics concerns, recognizing the importance of personal information and privacy.

In China, Alipay has become an integral part of the country's infrastructure. However, this comes with immense responsibility and obligation to the public.

The Chinese central bank has introduced e-CNY. Why has it not gained broad acceptance yet?

The e-CNY pilots have fallen short of expectations due to several factors. Entrenched consumer habits and the absence of a well-developed ecosystem are major hurdles. Motivating people and players to recognize the direct benefits of using e-CNY has proven challenging. A more focused approach, concentrating pilot zones on specific areas could have been more effective. The People's Bank of China and commercial banks must now ensure that the benefits become clearer.

What motivated the development of e-CNY?

Several factors propelled China's e-CNY push. The country was a leader in internet payments, but the P2P issue in 2017 shocked the fintech industry. Facebook's announcement of the Libra project, aiming to reach its 2.7 billion users, sent shockwaves through China, which had been at the forefront of this space. The realization of global competition in fintech was a significant impetus behind the e-CNY's development. Moreover, the Chinese government sought to establish control over the payment infrastructure, viewed as a critical component of the country's financial system.

What do you see as the most promising opportunities in China's fintech sector?

Financial institutions and insurance companies in China are poised to make significant investments in developing and applying fintech solutions, presenting the sector's most substantial opportunity. The overall sentiment towards financial technology has remarkably improved, and China's fintech experience could prove invaluable for other emerging markets, especially those involved in the Belt and Road Initiative (BRI).