In 2018, China's fintech investment and financing reached a stage high, and then cooled down against the backdrop of tighter regulation. The domestic market has formed a market pattern dominated by a handful of large Internet companies, with a wide range of fintech application scenarios, but at present, the depth of fintech integration is still insufficient and stays on the surface of the business. With the improvement of financial infrastructure, fintech will make more efforts to serve the real economy, financial inclusion, and improve hard power and other directions.

Fintech is the deep integration of financial services and underlying technology

The term Fintech was first proposed by Citibank in 1993, synthesized from Finance (financial) + Technology (technology). According to the Financial Stability Board, Fintech refers to financial innovations brought about by technology that can generate new business models, applications, processes or products that can have a significant impact on the way financial services are delivered.

China's central bank also referred to the above definition, pointing out that "fintech is a technology-driven financial innovation, aiming to use modern scientific and technological achievements to transform or innovate financial products, business models, business processes, etc., and to promote the quality and efficiency of financial development".

The essence of fintech is the combination of financial services and underlying technology, the application of artificial intelligence, big data, cloud computing and blockchain to create a new service model in the areas of financial payments, financing, investment, insurance and infrastructure.

Late start, later on

The global development of financial technology can be divided into three major stages, respectively, financial informatization, Internet finance, and the deep integration of finance and technology. As early as the 1980s, Western countries began to explore the integration of electronic information technology and finance in the context of financial liberalization.

In 1993, China's State Council's "Decision on Financial System Reform" proposed to "accelerate the construction of financial electronic construction", China's financial informatization on the agenda, with the rapid development of mobile communications and logistics infrastructure, China is now in the first echelon of the global financial technology competition.

China's investment is gradually cooling

According to KPMG's Fintech Pulse data, mainland China's fintech investment and financing experienced a peak in 2018, with $4.5 billion of investment in 2019, a contraction of 82% compared to the first half of 2020, which further dropped to $610 million.

Market Pattern Oligomerization

Other countries and regions are dominated by small and medium-sized enterprises in FinTech, while the structure of China's FinTech market tends to be dominated by a handful of large Internet companies. The 2020 Hurun Global Unicorn List shows that the valuation of China's 18 unicorn enterprises in the fintech industry supplies 1,634 billion yuan.

Many application scenarios, the depth of application is still insufficient

Financial technology in the traditional financial field application scenarios and segmentation of the track are numerous, the traditional financial institutions and Internet companies have their own advantages, competition and cooperation coexist. However, at present, the application of financial technology in various fields is still insufficient, whether it is the input and output comparison is low, the technology integration is insufficient or the tightening of the regulation, all lead to the overall application of financial technology depth is not enough.

In the future, as the new infrastructure rises to the height of the national strategy, it will promote the development of fintech to enter a new stage, in general, to better serve the real economy, financial inclusion and improve the hard power of science and technology is the direction of the three big efforts.

-- The above data comes from China Science and Technology Financial Services In-depth Research and Investment Strategy Planning Analysis Report