A Hong Kong shop clerk tests the Alipay app. Alipay launched its Hong Kong version on May 24, 2017.
If KPMG is set to launch a compilation of top 50 financial technology or fintech companies in China, it indicates the new business segment has truly arrived and is poised for rapid growth, said Zhou Jun, vice-chairman of its China unit.
The global audit, tax and advisory services major accords high regard to the fintech segment, which refers to online payment systems and other financial services offered digitally. KPMG will persuade Chinese companies to upgrade their systems so as to integrate fintech into their operations, he said.
"China is indeed taking the lead in global fintech," said Wang Lipeng, a partner at KPMG. "Fintech is bringing profound changes to the Chinese economy and industrial reforms."
He attributed China's lead in fintech to two key aspects: the fast-growing internet-related businesses; and the government's encouragement for innovation and entrepreneurship.
"Fintech benefits a lot from a culture of innovation and experts driving the development of internet-based businesses," Wang said.
According to a report by DBS Bank and EY, 40 percent of online consumers use electronic payment tools. China's investment on fintech last year was .8 billion, much higher than the previous year's level.
China is now home to four fintech unicorns－starups whose valuations have grown to billion and above.
Ant Financial, from the Alibaba stable helmed by Jack Ma, leads the pack. It is followed by Luafx, a peer-to-peer lending platform powered by Ping An Insurance; Qufenqi, an online retailer that allows monthly installments; and JD Finance, a financial subsidiary of JD.com Inc, one of China's biggest online marketplaces.
Their rapid growth has lured traditional banks to fintech services. According to China Merchants Bank, it has earmarked 790 million yuan (4 million) to encourage innovation in fintech projects.
In March, the bank agreed to grant 1 percent of its annual profit to fintech-related project innovation.
The bank also plans to intensify its efforts to adopt mobile technology, cloud computing, big data and blockchain technologies in its operations.
Industry observers, however, said fintech services should be adopted in a conscious way, not as a fad. Sringent risk management in enterprises holds the key, they said.
Chen Shengqiang, CEO of JD Finance, said in a recent message to the China Banking Regulatory Commssion that risk management is the very foundation of the fintech business.