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Community Blog The Future of FinTech: From Digitization to Blockchain

The Future of FinTech: From Digitization to Blockchain

The mobile Internet has driven Internet finance, while the latest generation of IT technology such as big data, cloud computing, blockchain, and AI are driving financial technology.

As a result of advancing digitization and the integration of smart devices becoming the daily norm, the FinTech industry has seen a period of rapid growth. This has paved the way for a host of innovative e-lending and e-payment solutions, which help millions of customers around the globe gain access to these types of financial services in an instant.

However, the FinTech industry often struggles to keep up with the ever-growing user demand and the changing regulations within the financial sector. That is why FinTech companies must continuously design, deploy, and maintain an IT infrastructure that is both scalable and cost-effective in order to compete within this dynamic market.

Alibaba Cloud's FinTech on the Cloud solution provides multiple benefits that help solve these problems. They assist the FinTech industry to not only address the challenges they face but help create tremendous value for businesses. Here are just three of the eight major advantages of using this service.

Customer Satisfaction through Low Latency

In today's fast-paced world, customers are looking for quick (if not instant) response times online. This is especially true when it comes to consumer-facing FinTech businesses who only interact with their users online. As a result, to ensure that customers are completely satisfied, FinTech companies must be able to process transactions quickly, as well as have low-latency and dependable infrastructure in place.

In response to these ever-growing needs, Alibaba Cloud uses a global, distributed infrastructure. It is scalable, reliable, and delivers low latency to meet your customers' high expectations.

Fast Go-to-Market and Cross-Regional Expansion

In order to keep attracting new customers and continuously drive business growth, FinTech companies must frequently release new products, upgrade the applications they already offer, and launch their marketing campaigns in a timely manner.

With Alibaba Cloud's infrastructure, FinTech businesses have the ability to scale their resources up and down with ease, keeping in line with user demand. FinTech companies also have the capability of establishing a strong global presence with high scalability and availability thanks to Alibaba Cloud's extensive worldwide infrastructure, which operates in 20 regions with 61 availability zones, as well as a vast network of 2,500+ Content Delivery Network (CDN) nodes and 110+ Point of Presence nodes.

Cost-Efficiency

Every business aims to be as cost-efficient as possible. Alibaba Cloud specifically offers FinTech companies a wide range of cost-effective solutions to satisfy this need.

Thanks to the nature of the cloud, both the operational and the maintenance costs commonly associated with paying for an on-premise solution are instantly removed. In addition, Alibaba Cloud also provides FinTech companies with pay-as-you-go options as well as a low-rate subscription service. These give companies a wide range of pricing models to choose from based on their business needs.

In comparison to other products and services currently available on the market, Alibaba Cloud's solutions offer many cost advantages. Take PolarDB for example - this Alibaba Cloud solution costs just a tenth of the cost of a traditional database.

FinTech companies are shaking up the financial services market with the way in which they operate, challenging traditional products and services that are currently on offer. Alibaba Cloud has a variety of solutions that come with a wide range of benefits.

To find out more about the other business benefits of FinTech on Alibaba Cloud, download the FinTech on Alibaba Cloud whitepaper today.

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From Financial Intelligence to Blockchain: Five Key Technologies That Will Determine the Future of Fintech

An overview of Liu Weiguang's speech and PowerPoint slides discussing Fintech innovations.

Liu Weiguang is a Vice President of the Alibaba Group and the General Manager of Intelligent New Finance at Alibaba Cloud. In this blog, we'll be sharing Liu Weiguang's insights into the future of, financial technology (Fintech), and discuss how it will be the most important driver of the development of our commercial society.

Fintech is an important tool that can help guide and achieve the high-level integration of business, business optimization, and new business creation. This presentation will explore the differences between Fintech, financial IT, and information-driven finance in the practices of Alibaba and Ant Financial. In addition, it introduces the five key Fintech technologies of today. Together, the five technologies will effectively realize the potential of the Internet and digital finance.

Overview of the Fintech Field

1) Digitization is Driving the Development of Technology

From the Internet to the mobile Internet to the Internet of Everything, Internet technology has gone through several different development phases. The first and second generations of technology emphasized connectivity, information acquisition, and social networking. Today, with the ongoing development of the Internet of Things (IoT) and 5G, connectivity between things and people, things and information, and things and networks are becoming the new trend.

In the commercial society of the future, we expect the next generation of Internet technology to place greater emphasis on the "Internet of Value." The Internet of Value emphasizes the transmission and interaction of commercial value and valuable information over networks in the service of the online operations of our commercial society. In the era of intelligent business, technologies such as high-speed connection, security technology, and privacy protection as well as the development of digital assets, cross-institution trust-based collaboration, smart contracts, the Internet of Value, and the sharing economy, more digital economies will realize their potential through the Internet of Value.

A great deal of technology has been required to support each stage in the development of the Internet. Such technologies include big data, mobile application, biometric recognition, IoT, artificial intelligence (AI), and real-time data analysis. Today, the emergence and development of blockchain and secure multiparty computation (MPC) have opened up the possibility of the Internet of Value and intelligent commercial society operations.

2) Fintech = Technological Breakthroughs + Financial Engineering

Based on the reports published in the MIT Technology Review, new technologies, such as biometrics in 2017, various combinations of AI with business and finance in 2019, and blockchain in 2020, have driven the development of digital currencies, achieved technological breakthroughs, and promoted the evolution of financial engineering. Therefore, the technologies of the future will not only support the financial and business fields but also drive new developments in the financial industry.

Fintech is the core competency required for high-quality development: Between 2019 and 2020, the People's Bank of China published several reports on the impact of Fintech on the development of the Chinese banking industry. Fan Yifei, the President of the People's Bank of China, pointed out that Fintech will be a strategic sector in the future global competition in the financial industry. Whoever masters this technology will be the strongest player in the financial industry. This opinion is widely held in the industry. Banks are increasingly aware of the role of technology in driving their current and future business development and are attentive to the ways technology can support their future digital upgrades and transformations.

Today, China is already the world leader in mobile payment technology. In 2018, over 530 billion mobile payments were processed in China, with a total value of more than RMB 440 trillion. This was 4.89 times China's GDP for that year.

Fintech Security in the Cloud

Alibaba Cloud Security products enable fintech organizations maintain business availability by safeguarding their servers and infrastructure.

Defending Fintech Organizations with Alibaba Cloud Security Center

In the fintech industry, the continued success of the business relies on trust. Effective IT security, and the ability to detect suspicious transactions and behavior, is paramount. So, when you’re choosing a cloud service provider, you need one that offers a comprehensive solution for continuously monitoring your servers in order to detect and block unwanted activity.

On your Alibaba Cloud account console, the Security Center is your central dashboard for controlling all of the key security-related aspects of your server estate. It detects security events in real time, monitors your systems against many user-configurable baselines, checks for hundreds of known vulnerabilities, and can even fix certain system flaws automatically.

The basic edition of Security Center is free of charge, so you can try it straight away. For the full suite of functions and features, Advanced and Enterprise editions are available on a simple subscription basis with optional auto-renewal.

Managing Malware and Misuse

The Cloud Threat Detection feature, part of Security Center, continually checks your servers using multiple popular anti-virus engines. It’s already in use on millions of cloud servers, and scans hundreds of millions of files every day. Among the threats it can detect are cryptocurrency mining programs, viruses, DDoS trojans, ransomware, known backdoors, and many other types of malware.

Maintaining server activity logs and being able to easily search them for evidence of system misuse, is an important part of the IT security function, and never more so than in fintech. Alibaba Cloud Security Center makes this easy. You can search and analyze more than 10 different logs from the past 30 days, including starting of server processes, incorrect system logins, DNS requests and more. You can also create automatic alarms which will notify you if certain thresholds are breached. If you need to search more than 30 days’ entries, you can download up to 180 days of data to analyze offline.

One of the most powerful features of Security Center Enterprise Edition is the baseline check, which scans your servers every day in search of poorly configured security settings that may have been created accidentally or even maliciously. These include weak or missing passwords for databases, SSH, FTP and remote desktop. It also checks for unnecessary open ports, as well as many other best-practice Linux and Windows server security configuration. You can use the default baseline settings and scanning schedules or create your own.

Fintechs: How to Capitalize on Your Data

From business intelligence to quantum computing, fintechs are now embracing a range of increasingly data-driven solutions to disrupt the market.

Fintech companies have unleashed tremendous technical disruption on the banking industry. However, the revolution is far from over, as data becomes the driving force for change in this dynamic and competitive sector.

From business intelligence to quantum computing, Fintechs are now embracing a range of increasingly data-driven solutions to disrupt the market.

Big data analytics form the foundations of this approach, with Alibaba Cloud providing a range of intuitive and easy-to-use platforms to help Fintech companies capitalize on their data. For example, our MaxCompute data processing platform and QuickBI business intelligence service can help extract value from vast data lakes.

Using our intuitive drag-and-drop interface, these data analysis solutions can provide in-depth insights into user preferences, brand perception, and future trends to help drive strategic decision-making.

Combined with our DataV visualization service and DataWorks data warehousing solution, you can use data mining and analysis to identify and drive further business and functional strategies across your operational, marketing and customer service divisions. This allows you to seize new opportunities that otherwise might remain hidden.

These tools are often coupled with our Machine Learning Platform, which supports data analysis, prediction algorithms, target marketing, virtual advisory chatbots, and many more applications to help Fintechs meet their ongoing data mining and analysis requirements.

Predictive Analytics

The Alibaba Cloud Machine Learning Platform can be put to work by investment companies who use predictive analytics to create investment ideas and forecast risks. For example, the platform's financial algorithms could assess the risks associated with a financial loan or investment.

The platform provides a scorecard component so users can calculate the capability of clients to settle their debt or make an investment, providing the means to manage risks effectively.

Robo-advisors are also gaining traction in the wealth management sector, where multiple AI-enabled applications are analyzing human patterns to offer in-depth personalization.

The ET Brain AI platform is another innovative solution. This ultra-intelligent machine learning platform is helping Fintech companies to build cost-effective, next generation, high availability infrastructures for AI and machine learning for real-time processing scenarios such as face, image, and text recognition.

This can help drive customer centricity for Fintechs where, for example, AI-based facial recognition can be used for online user logins.

Quantum Computing

Looking to the future, quantum computing holds real potential to rapidly solve complicated algorithms. Within the financial services market, it has implications for fraud analysis, risk management, and advanced financial data modeling.

Portfolio optimization is an emerging application area, where quantum computers could be harnessed to suggest investment decisions capable of balancing risk and developing recommendations that yield maximum returns.

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