KPMG’s latest China FinTech 50 report showcases Country’s Increasing Number of Influential FinTech Players

KPMG has released its China FinTech 50 report. Recognising the increasing number of high-quality players that will contribute to the diversification of China’s FinTech ecosystem, this year KPMG has adopted a “Double-50” approach, including 100 outstanding FinTech companies on the list.

Expansion to 100 FinTech companies reflects sector’s growth and promise

The 100 FinTech companies included on this year’s list were quantitatively assessed in five areas: technology and data, innovation and change, financial services offered, recognition in the capital markets and development foresight, KPMG explained in a press release.

2021 marks the fifth consecutive year KPMG has published the China FinTech 50 with the continued aim of promoting the development of China’s FinTech sector.

Honson To, Chairman, China and Asia Pacific, KPMG, said: “Under the People’s Bank of China’s FinTech Development Plan (2019-2021), we are seeing China’s FinTech industry continue to thrive, despite the impacts of the COVID-19 pandemic. In this year’s China FinTech 50, we identified a remarkably large number of high-quality companies through a market-guided and technology-driven selection process. As a result, we have decided to expand the list to 100 companies, including 50 established companies plus 50 emerging companies, to reflect both China’s fast-changing FinTech landscape and our positive outlook on the future of the FinTech sector.”

Jacky Zou, Vice Chairman, KPMG China, said: “The rapid development of China’s FinTech industry is being driven by supportive policies and the overall market demand. Nowadays, new technologies such as cloud computing, artificial intelligence, blockchain and big data have become more closely integrated into financial products and services. FinTech companies should take appropriate measures to mitigate emerging risks associated with technologies, while also guarding against financial risks. Business departments and IT and risk management functions at FinTech companies should work together on this issue. The development of RegTech can contribute to risk control in business operations involving technological innovations.”

Spotlight on FinTech’s convergence with other sectors

The 2020 China FinTech 50 report highlights the rapid integration of technology into every aspect of the financial industry and the increasing convergence of FinTech with other sectors. It also underlines the importance for businesses to safeguard against emerging risks associated with increased technology adoption.

Simon Gleave, Partner, Head of Financial Services, Asia Pacific, KPMG China, said: “FinTech and other new technologies continue to drive the development of new financial services models globally. In 2020, the pandemic has clearly accelerated digital transformation, and the strong demand and increased adoption of digital platforms, digital banks, contactless payments and other FinTech-related services worldwide have prompted financial service providers to increase their investment in FinTech, especially in China. We expect to see China’s local FinTech industry further develop and become a key part of the global market."

Tony Cheung, Partner, Regional Head of Financial Services, KPMG China, said: “Under the guidance of the People’s Bank of China’s FinTech Development Plan, traditional financial institutions have embraced technology and digital transformation through establishing FinTech subsidiaries, special funds and other types of investments. It is foreseeable that through the digitalisation of communication and service platforms, as well as adoption of artificially intelligence, technology integration in the financial industry will continue to be strengthened."

Thomas Chan, Partner, Head of Financial Services Assurance, Mainland China, KPMG China, said: “As FinTech rapidly develops, financial institutions have increasingly adopted  applications in areas such as big data risk control, robotic process automation, client acquisition, customer services and fraud recognition through AI in their daily operation to improve efficiency and customer experience. We are optimistic that as FinTech innovation and adoption continue, smaller market segments which are not covered in the traditional financial model can be reached, ultimately realising better financial inclusion and accessibility."

The report also points to increasing awareness among financial institutions that FinTech is indispensable to their business transformation and sustainable development. Since the onset of the pandemic, the demand for contactless financial services has greatly increased, and digital transformation has become an imperative for financial institutions. To this end, companies in China have increased their investment in and application of FinTech through the establishment of subsidiaries and special development funds.

Andrew Huang, Partner, Head of Financial Technology, KPMG China, said: “China’s FinTech sector has seen considerable progress in key areas, such as application scenarios, underlying technologies, and the regulatory environment. Key tasks for regulators at this stage are to nurture innovative enterprises and enhance efforts to develop RegTech. As these activities progress, it will present both challenges and opportunities for FinTech companies and traditional financial institutions.”