Building New Generation Digital Banks with Programmable Money and Trust: Are You Ready for the Next…

Banking is one of the sectors that most successfully implements technological developments in their products, services and processes. However, the actors of the transformation started with digitalization in finance are not only these banks anymore. According to Facebook report of Millennials + Money: The Unfiltered Journey , 92% of millennials, the largest single generation ever with their average age of 26.5, don’t trust traditional banks and this is no doubt shaped by the 2008 Financial Crisis. The most striking result was the new products and services which have for a while started to appear in the market and extend their reach. For example, in recent years, tech giants, Alibaba and Tencent, Ping An, Baidu and more that have both massive customer bases and vast cash reserves have provided new choice of payment for especially many unbanked customers with their digital wallet services replacing cash and credit cards in both local and global market. When the integration of technology and innovation into the financial sector is considered, it’s possible to say that despite its late start compared to its Western “counterparts”, the most important one, US, China was currently enjoying a “late-mover” advantage in fintech sector along with the liberalization of its economy.

If you look back a couple of years ago It’s not surprising that while two Chinese technology and payment companies, Tencent’s WeChat Pay and Ant Financial’s AliPay had respectively reached of 231.9 and 213.4 bn USD capitalization, whereas the US companies, Paypal, Mastercard and Visa were standing at of 47.6, 112.4 and 181.2 bn USD according to 2016 Factset financial data and analytics report. In another market study done by PWC “Global Top 100 Companies by Market Capitalisation” report published in 2018, There are two new entrants in the top ten, Chinese technology companies, Tencent and Alibaba, replacing US companies Exxon Mobil and Wells Fargo. While the US still dominates Global Top 100 with 54 companies in 2018 compared to 42 in 2009, China holds the second position with 12 companies (two more than last year and three more than 2009). Especially, Chinese technology and payment companies have the second largest absolute increase in 2018 compared to the data in 2017 with the rates of change, respectively 82% and 75% in market cap among 20 top countries across the globe.

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