ICBC launches fintech research institute to boost innovation
State-owned Industrial and Commercial Bank of China (ICBC) has set up a new fintech research institute to push its smart banking strategy, according to a filing to the Hong Kong stock exchange on Monday.
Why it matters: Chinese commercial banks are facing tougher competition from technology companies, such as Alibaba’s Ant Financial and Tencent, which have become major players in the country’s financial services sector in recent years.
- China’s “Big Four” state-owned commercial banks including ICBC have been showcasing their fintech capabilities and allocating more budget toward technology research in order to compete on product offerings and for customers as well as talent.
- Many traditional financial institutions have set up dedicated fintech units in partnership with Chinese internet giants to tap into their technology.
Details: ICBC’s new research institute is an important move which will help the institution “adapt to the new requirements of business transformation and changes of trend in fintech development,” the bank said in the filing.
- The institute will focus on the research of emerging technologies such as blockchain, big data, artificial intelligence (AI), cloud computing, distributed ledger, 5G, Internet of Things (IoT), information security, and others.
- ICBC expects the research institute to help push its smart banking strategy. The bank also plans to integrate the operations and management of the research institute with its existing fintech research lab.
Context: The government has stepped up efforts to develop the fintech sector in recent months, including the three-year plan released in August aimed at curbing risk and lending support.
- The central bank’s plan to launch digital fiat currency has also helped boost overall sentiment for Chinese fintech firms, Reuters reported in September.
China’s central bank releases 3-year fintech development plan