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Community Blog See How Technology Is Bringing Financial Services Online

See How Technology Is Bringing Financial Services Online

Data and new technology are the new driving forces behind today's new and exciting world of finance. See what Alibaba's doing now to make the future of finance a reality.

Relive the best moments of the Apsara Conference 2019 at https://www.alibabacloud.com/apsara-conference-2019.

During this year's Apsara Conference held in Hangzhou. Ant Financial's booth received a fair bit of attention from visitors, both young and old, enthusiastic about technological innovation in the finance sphere-with Ant Financial and Alipay being something of the super star. In fact, the booth was one of the most popular booths.

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At this event, Ant Financial shared its latest innovations finance and tech to conference visitors. Also at the conference, Simon Hu, president of Ant Financial, delivered a speech entitled "Financial Technology in the Era of Digital Economy" during the keynote session. He offered insights into the future plan and strategy of Ant Financial, being a leader of global financial innovation.

This year, Simon Hu stood on the same stage as he did last year. Although his title has changed from the president of Alibaba Cloud to the president of Ant Financial, his perspectives on technological innovation have not.

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Below is his full speech:

In the Internet era, the biggest change is that technology-driven finance is moving from offline to online. Among changes, the most significant of changes come from the generation of data and the emergence of more powerful computing. Today, when we talk about credit, wealth management, or digital currency, we need to be aware that they are all products of recent technological innovation.

The financial innovation system has experienced a dramatic shift because of technologies like graph-based intelligence analysis, cloud computing, the Internet of Things, and quantum computing. In essence, these technologies came into being thanks to an evolution that happened to computing technology and computing power.

Technology is reshaping the way finance is done. In China, Ant Financial introduced fast payment a decade ago. Being one of the biggest payment transformations in the world, fast payment has pushed mobile Internet in China forward by five years. Before Alipay was invented, banks trusted only their own passwords in the entire process of payment. However, with fast payment, banks started to trust the passwords provided by Alipay and funds were deducted from bank accounts. That is, it is risk management and innovative technologies that empower finance today.

Next, there's credit rating. Today, in China, it is relatively easy to use data to be able to quickly obtain the credit rating of an individual and company. Speaking generally, credit rating serves as a means for improving efficiency in the process of trade. Zhima Credit (or Sesame Credit) has already reduced China's guarantee deposit by 100 billion RMB this year.

Then there's global payments. Nowadays, we can make payments around the world by using our smart phones. Naturally, all of this is thanks to technological innovation.

Also, mutual insurance. The service Xianghubao, literally mutual insurance or mutual protection, is an online mutual aid platform launched by Ant Financial. The service has attracted 90 million users, making it one of the largest mutual insurance services in the world. This service is also driven by technological innovation.

And then there's digital currency. Thanks to the advances in computing power and cryptography, the concept of digital currency is evolving thanks to new technological innovations around the world.

We believe that financial technology is a great opportunity in the era of digital economy. All financial services will be delivered online due to the massive amount of Internet computing out there nowadays. All financial services will be driven by data and technology, with the capabilities of financial technology being based on data and technology.

First, the technology of data intelligence has dramatically improved. We have developed a graph-based intelligence analysis platform that is capable of processing ten-billion-point and one-trillion-edge graphs. These graph computing and storage capabilities help digital finance upgrade from a single point modeling to something that can be called network intelligence. These technological innovations can be applied widely in financial technology application scenarios.

Next, this graph intelligence platform supports the modeling of millions of training data. And with data intelligence, an intelligent and open computing framework can be formed to provide support for exabytes worth of computing operations.

Second, risk management. Our account security, liquidity management, and credit risk management have been substantially improved thanks to huge advances in technology. Today, risk management models can be self-learning. In the past, a week or so was required in which mathematicians had to adjust the risk management model for it to be trained. However, today, thanks to machine learning, the model can be automatically updated every hour. Similarly, with powerful online computing and AI capabilities, risk management can be improved to a level we could only imagine before.

Third, blockchain technology will have a huge impact on the entire commercial trade industry. Ant Financial believes that blockchain technology is the now and the future of what is and will be the trust infrastructure of financial technology. At present, our blockchain technology is able to support one billion accounts and one billion transactions per day. Our homomorphic encryption and decryption algorithm is six times faster than our counterparts in the industry. In the past several years, the cost of blockchain storage has reduced by 50%. At Ant Financial, with our proven excellence in scalability, we can offer cross-chain message processing capacities of over 100 thousand calculations per second. All of this technological innovation has a huge impact on financial services.

Fourth, biometrics. Today, 80% of Alipay transactions rely on biometrics. Compared to the use of passwords and fingerprints, face recognition has become a prominent biometric technology. The accuracy of face recognition has reached 99.99%. Human faces in photos, videos, and software can be recognized by means of modeling. Similarly, we have partnered with mobile phone manufacturers across China to jointly established a financial identity system. The system offers a high level of security and has already collected the identity information of 1.5 billion devices.

Fifth, there's privacy protection technology. As large volumes of data are generated on the Internet, one important question to ask is how we can secure data through the innovation of financial technology. To answer this, Ant Financial has built a Secure Multi-Party Computation (SMPC) platform and a trusted computing environment. Technologies such as zero knowledge proof and homomorphic encryption ensure that data is available, invisible, credible, and valuable. All of these underlying technologies are driving the development of financial technology.

Ant Financial not only applies financial technology to its own business operations and services, but even more so hopes to ensure that financial technology serves social institutions and small- and micro-enterprises (SMEs). To illustrate this, the first case I would like to share is our cooperation between Shanghai Stock Exchange, Alibaba Group, and Ant Financial. Our financial technology helped to provide regulatory capabilities for China's science and technology innovation board (STIB) through enterprise approval and continuous supervision. Financial regulation and intent perception facilitate the development of STIB.

In the 310 lending model for SMEs provided by Ant Financial, blockchain technology was applied to the financing of SMEs. Blockchain technology ensures that small business owners can use transaction vouchers to obtain bank loans without the need of applying for a mortgage.

What's even more exciting is that today China's financial technology practices are being adopted and shared on a global scale. At present, Ant Financial serves 1.2 billion users worldwide, who use the services powered by the financial technological innovations of Ant Financial. Our technologies are used by partners such as Paytm in India, DANA Wallet in Indonesia, and Touch'n Go eWallet in Malaysia. We are now sharing increasingly more technologies with Asian and European countries to help them develop financial technology.

We have maintained in-depth cooperation with several major financial institutions across China. The technologies of Alibaba Cloud and Ant Financial have fueled the digital transformation of Agricultural Bank of China (ABC) and Hua Xia Bank (HXB), for example.

All of these above cases have helped us come to a deeper understanding of digital transformation and the creation of both inclusive finance and green finance.

In the era of digital economy, we can book airline tickets, take the subway, and check in hotels using our mobile phones. With all of these changes, we're now starting to link our digital identities to the physical world and are beginning to explore the potential of financial technology.

This year, the Apsara Conference is 10 years old. We believe that today's finance is driven by technological innovation and data intelligence, and future financial centers will emerge from new hubs of science and technology. For example, financial innovation in the United States has begun to migrate from New York to Silicon Valley. Similarly, China's financial innovation centers were Beijing and Shanghai in the past decades, but in the future we will see Shenzhen and Hangzhou playing an increasingly important role in financial technology innovation. The driving forces for all of this, of course, are technological innovation like cloud computing and data intelligence. Technological innovation can be regarded as the engine that is helping to stimulate financial innovation.

In many ways, technology is not only promoting innovation across several different industries but it is also boosting financial productivity. We can double or even triple the efficiency of finance with technological innovations like digital currency, financial risk management, financial liquidity management, and credit risk management. Technological innovation will play an increasingly important role in the future, which is something of an unchanging rule for technology-driven finance.

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