Instead of fintech, Alibaba affiliate wants to go “techfin”
Ant Financial is building a new model of selling money market funds online, challenging the popular method of buying them from fund supermarkets
Alibaba’s affiliate Ant Financial, China’s leading fintech company, is building a new model of selling money market funds online, which is likely to challenge the popular method of buying them from fund supermarkets.
In a company announcement released on Tuesday published on its official WeChat account, Ant Financial said it would launch a new feature called “Fortune Accounts” on its wealth-management app, Ant Fortune, a platform selling a broad range of investment products to Chinese consumers.
By registering on “Fortune Accounts,” companies with investment products can now sell on the platform via an account page. Unlike the supermarket model, which simply displays products based on name, net worth and rating, companies can now directly reach consumers and build their brands. They can provide financial advice and promote their own products instead of competing on an online supermarket shelf with dozens of others.
The first five companies to gain access to “Fortune Accounts,” are Bosera Funds, Aegon-Industrial Fund, Tianhong Fund, China Southern Fund and CCB Principal Fund. The new feature will be open to all fund management companies after it officially goes online in June. This model may be further applied to banks, securities and insurance companies, Ant Financial said.
Ant Financial promises to open its platform and give full support to help these financial institutions fly, from sharing backend data of users to driving traffic to the company’s stores.
The move is also considered to be a declaration of the company’s positioning. Despite the heat of fintech, Ant Financial said would only develop tech to improve platforms solely to serve other financial institutions. It does not plan to develop its own financial services, promoting itself as a “techfin” pioneer instead.
“The core of the finance industry is to manage risks. While “techfin” uses technologies and data to promote financial innovations, serve ordinary consumers and merchants, as well as upgrade their risk-management capacities,” Jing Xiandong, the chief executive of Ant Financial was quoted as saying in the announcement.
“It’s not playing with concepts,” Jing added, “but these two terms are fundamentally different philosophies.” He was referring to what most people are familiar with – financial technology, or fintech. One of the fastest-growing areas for venture capitalists, is an industry composed of startups and established financial and tech firms that use innovation trying to compete in the marketplace of players in delivering financial services. Ant Financial is not trying to replace existing financial institutions, but help them innovate.
So far, Ant Fortune has accumulated over 35 million paid users and 180 million logged-in users since its launch in August 2015. It has become the most popular asset-management digital platform in China.