Technology has contributed to change and innovation in the financial services sector. Financial technology is any technological innovation in financial services. Those engaged in the industry develop new technologies to disrupt traditional financial markets. Various start-ups have involved in the process of creating these new technologies.
With the presence of financial technology (fintech), people who have not familiar with banking services can now access the financial products and services they need.
The progress of fintech in China is known to be very massive. Various finteches are present to provide innovation to consumers, including loan products and even payment system.
Then, why is fintech developing so rapidly in China?
According to china-briefing.com, there are several reasons why China’s FinTech industry has developed so rapidly, especially peer to peer lending. One of the main reasons is that the policy factors. The Chinese government always supports the policies so that the fintech can develop rapidly.
The authorities in China tend to be flexible for fintech development. This flexibility provides space for growth that tends to be expansive.
The industry has also helped to serve the demands of groups that were previously excluded from traditional banking, such as small and medium-sized enterprises (SMEs) and low-income earners. Furthermore, Chinese consumers are more open to sharing data, especially the generations of the 1980s and 1990s who are the main users of FinTech.
Additionally, many fintech companies already have good and sustainable business models. However, many fintech companies do not have a business model that is ready to support their growth. This condition also contributed to the proliferation of illegal fintech in China, which actually caused losses to the people.
So now the Chinese government puts the concern to strengthen its rules, by closing platforms that are not feasible to operate.
