The Bank of the Future

Citi GPS: Global Perspectives & Solutions March 2018 © 2018 Citigroup 40 Figure 30. Comparison of Online-only Banks Setup by Internet Giants Baixin Bank MYbank WeBank Shareholding CITIC Bank (70%) Baidu (30%) Alibaba (30%) Fosun (25%) Wanxiang (18%) Jinrunzichan (16%) Others (11%) Tencent (30%) Baiyeyuan (20%) Others (30%) Liye (20%) Launch date Nov. 2015 Jan. 2015 Jun. 2015 Overview A unique tie-up of a search engine giant with traditional bank. Positioned as the bank "not for the rich, but for the little guys". The pure online bank offers smaller loans than regular banks by leveraging its cloud- based model, and does not accept applications of over RMB5mn. Sells financial products for other institutions and grants small loans to consumers Loan offerings Small personal loans Focused on offering 3 kinds of loans which indirectly tie in with Alibaba's core business: (i) for people in rural areas (ii) for Internet start-ups (iii) for Tmall and Taobao sellers Small personal loans and auto loans Source: Citi Research [A] Ant Financial Builds an Empire of Services Ant Financial is one of the largest FinTechs in the world. Its strategic vision is based on (1) leveraging the power of the Internet and big data; (2) empowering financial institutions to create an ecosystem; (3) serving both SME and individual customers; and (4) providing inclusive financial services. Ant Financial’ s competitive advantages include a large user base; an incubator for vital, innovative financial products; and a world-class financial cloud technology platform. In addition, it is a pioneer in the DT Era, employing data to drive innovation. Figure 31. Ant Financial Ecosystem Source: Citi Research DINING GAMING ONLINE SHOPPING TRANSPORTATION MOBILE TOP-UP CREDIT RED PACKET/ MONEY TRANSFER DAILY HOUSEHOLD SERVICES RETAIL STORES MEDICAL SERVICES CAMPUS FINANCIAL SERVICES PUBLIC WELFARE Ant Financial Has Penetrated Into More Consumption Scenarios in Daily Life Transactions from Alibaba China retail marketplaces in 2015 take up less and less TPV of Ant Financial