Year: 2019
Type: book-chapter
Abstract: Imagine this scenario.A young adult opens an app on her mobile phone.She chats and messages her friends over social media, posts photos, plays games, shops for whatever she needs, orders from a restaurant, buys tickets to a concert, arranges transportation, watches videos, listens to music, and books travel.She pays for all of it using her online account, transfers cash between her money market fund and bank account, takes out an unsecured loan, buys and sells investments, sends and receives money, and buys insurance.All of this within one app.While this story may once have seemed fictional, it is now a reality and currently available on the WeChat app from the Chinese technology company Tencent or on the Alipay app from its rival Alibaba.Both companies have built online marketplaces and mobile apps that combine e-commerce, social networking and gaming.They also offer financial products including payments, deposits, loans, investments, bank accounts and insurance.Their platform ecosystems now connect more than a billion users with a wide variety of non-financial and financial services manufactured in-house or by thirdparties.Similar services may one day be available from U.S. companies like Amazon, Apple, Google or Facebook.The Chinese technology companies are known as TechFins, a term first coined by Alibaba's Jack Ma in 2016 to describe Ant Financial -the financial services arm of the Alibaba ecosystem.Ma argues that TechFins are harnessing technology to redefine financial services and increase financial inclusion.He contrasts this mission with the goal of FinTech companies who use technology to profit from selling financial products to customers.Ant Financial's stated purpose is to provide access to capital and financial services to young people, small businesses, and poor nations that are underserved or unbanked: 2 "Fintech takes the original financial system and improves its technology," said Ma... "TechFin is to rebuild the [financial] system with technology.What we want to do is to solve the problem of a lack of inclusiveness."Ultimately, TechFins purport to use technology to create a world where customers have access to financial services just like tap water -you open the tap and water just flows out. 3 From being a minority view several years ago, the new consensus among bank insiders and industry commentators is that TechFins like Alibaba and Tencent, not FinTechs, represent a greater threat over the next decade to banks, asset managers, insurance companies and other financial incumbents.The other threat comes from a diverse collection of North American technology companies known collectively as "BigTech" (or "Big Tech").4 BigTech companies are Amazon, Apple, Facebook and Google, King, Michael R. 'The Competitive Threat from TechFins and BigTech in Financial Services'.In The Technological Revolution in Financial Services, edited by
Author: King, Michael R.
Institution: University of Victoria
Language: English
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2991411439