Basing on the majority of investment accounts, China is said to be the global leader in financial technology and Internet banking investments.
Financial technology (or fintech) attracted around half of all the total Chinese venture capital last year and major Internet banks have performed well financially relative to other startups.
Baidu Inc., China's leading search provider, became the latest technology giant to open a direct bank this January. They have joined forces with CITIC Bank, a Chinese investment firm, to form Baixin Bank. Baixin is a bank that will offer online-only bank transactions and lending services for both consumers and small businesses.
With the launch of Baixin, Baidu joins Internet giants Tencent Holdings and Alibaba in offering direct transactions through online banks.
Tencent, the operator of China's largest social network WeChat, formed WeBank in 2014.
Alibaba introduced MYBank and Ant Financial, two of China's most successful financial technology ventures.
The growth of financial technology in China is largely an extension of services from Baidu, Alibaba and Tencent--all of which control much of the online and mobile life of Chinese Internet users.
Other Chinese companies are following this trend. Xiaomi, one of China’s biggest online smartphone vendors, bought a 30 percent stake in Sichuan XW Bank last December. Sichuan XW Bank is a major Internet bank in China that leverages data to target consumers and small businesses.
Meituan.com, a website that specializes in offering group-buy options to consumers, also formed Julin Yilian Bank, and received its banking licenses last Dec. 2016.
According to a joint report by the DBS bank and consultancy firm EY, fintech investments surged to about $8.8 billion in just 12 months.
Ant Financial is said to have raised $4.5 billion in early 2016. This is the largest single private placement in financial technology history, which boosted the company's valuation to $60 billion.
The traditional banking industry in China is the biggest growth enabler of fintech, as major banks generally focus on serving state-owned enterprises, large private companies and local and regional governments. The under-served sectors have been a major benefactor of Internet banks in recent years.