China’s financial technology industry’s growth may seem like it’s peaking considering the huge increase of internet-based payments in the past few years. However, the industry has yet to reach its full potential, according to experts.
China’s economy, the second largest in the world, has one of the highest FinTech adoption rates, based on a 2017 report by multinational services firm, EY. The report showed that 69% of digitally active consumers in China utilize FinTech services, comparedto the U.S. with 33%.
But, according to David Ye, co-founder and Chairman of Rong360, a huge portion of the current growth is attributed to payments.
“China has been leading in some FinTech space such as payments. China is way ahead of other leading countries in payments with 60 to 70% of penetration,” Ye said.
However, Ye added that other FinTech spaces such as access to credit online, credit cards, credit infrastructure and access to insurance, are still under-penetrated and need more improvement. “That’s why we expect the whole sector to grow double digit, in some sectors maybe high double digit in the next five, ten years to come,” he added.
China’s FinTech industry’s market size has already exceeded 12 trillion yuan or roughly $1.9 trillion at the end of 2015 based on a report by McKinsey and Company.
The growth potential of the industry has fueled the expansion of several Chinese FinTech companies. Multiple Chinese FinTech firms, including Jianpu Technology, Rong360’s subsidiary, launched initial public offerings in the U.S.A. last year.