Mid-sized Industrial Bank has signed a strategic partnership with Microsoft China in Shanghai to shore up its smart banking capabilities, the latest evidence of mainland Chinese banks embracing technology-driven innovation.
The Fujian-based lender would work with Microsoft to ride on the US company’s strength in artificial intelligence (AI) and experience in helping companies make their digital transformations, the bank said on Wednesday.
Its financial technology subsidiary CIB Fintech will also work with Microsoft to build up its financial cloud-computing capacity to serve banking peers and other financial institutions.
Chinese banks are strengthening their digital might in a market where traditional financial institutions are being seriously challenged by emerging internet financial companies.
“The tie-up with Microsoft is a big decision made by the bank in the digital era,” said Sun Xiongpeng, vice-president of Industrial Bank in Shanghai on Wednesday.
Industrial Bank said it would apply deep machine learning and AI technology in risk controls, compliance and wealth management.
Traditional Chinese banks are rapidly embracing technology to catch up with the go smart trend to cater to the nation’s tech-savvy consumers.
The banks are cooperating with internet majors like Alibaba Group – owner of the South China Morning Post, Tencent Holdings, Baidu and JD.com to shore up their digital strength. But at the same time, they are also competing with these disruptive technology giants for China’s emerging group of wealthy clients.
While banks are attempting to build up their own technological strength, they are also increasingly joining hands with technology companies that are better positioned and experienced in advanced technologies,” said He Fei, a senior researcher at Bank of Communications in Shanghai.
Cooperating with technology companies would be a short-cut for banks, as building up one’s own technological strength, though important, takes time, he added.
Industrial Bank is among the first few commercial banks in China to test the latest technologies such as AI in its technology-driven transformation.
The bank along with five others, including the nation’s largest by assets, the Industrial and Commercial Bank of China, have introduced robo-advisers as part of their online wealth management platforms, reflecting just how hard the country’s major banks are fighting to gain an edge over rivals in the sector.
The emerging sector had no dominant players, so banks compete head-to-head with other asset managers and technology giants, analysts said.
Shares of Industrial Bank bank surged 5.82 per cent to close at 18.18 yuan (US$3) in Shanghai on Wednesday, ahead of the 0.23 per cent gain of the benchmark Shanghai Composite Index.
Re-disseminated by The Asian Banker from the South China Morning Post