‘Blazing a trail to the fastest growing marketplace on earth’ was the title theme of this, the inaugural Money20/20 event in Asia. It was immediately apparent that Asia is not only quick at moving from behind, it is now far in front of the rest of the world when it comes to Next Gen financial services.
We spent half a day with Ant Financial who now own many large successful companies including Alipay; Ant Fortune; MYbank; Sesame Credit; Ant Financial Cloud specialising in loans, insurance, digital id, AI etc. They define themselves as “TechFin” meaning that they are a technology company have evolved into financial services. Their technology today delivers 500,000 transactions per second and will achieve 1 million transactions per second when they soon release their Next Gen platform. Strategically Ant acquire all mainstream companies that are complementary plus they invest heavily in many smaller smart emerging R&D companies.
Within 2 years Ant Financial expect to have some 2 billion customers and by 2022 their commitment is to enable every single person in the world who does not have a digital id today to be supplied with one – thus enabling true ‘financial inclusion’ everywhere. By 2020 they also target having 100,000 partner companies that focus on smaller niche business opportunities (meaning anything less than 1 billion customers!).
Ant’s strategy starts ground up then builds high value business propositions from there:
• ID: establish a digital id for each person
• SECURITY: ensure 99.7% security protection per person (using multi authentication)
• AI: run all customer activity through self-learning AI to get a base foundation of intelligent security, intelligent marketing (know enough of the current state of customer to predict what they want next) which then empowers business propositions
• SERVICES: deliver intelligent services, e.g. consumer orders a train ticket by voice zooming in with more and more detail of dates, type of class, cost levels etc, but then after that’s complete it intelligently links e.g. “I want a hotel” and it automatically knows the travel period and so fills in all details and predicts based on class and price of ticket the appropriate hotels etc. which again you then refine through voice or any other method to zoom in.
This is the basic foundation of Ant Financial: establish the foundation which then empowers the business verticals.
The foundation’s strength enables massive advances and advantages in its operating businesses. For example, time to new markets: A new domain (country or business segment) using its experience the AI engine can self-build a unique credit model for the new country within 2 months, with exceptionally low defaults. Another example is to eradicate insurance assessors: Ant uses the foundation AI engine to process images in auto insurance for assessing damage and issuing claim payments. They have 88% accuracy predicting the right claim payment amount just off photos sent in so save millions by not sending insurance assessors out in the field any more. The inaccuracy is sufficiently low compared to the benefits – and they have a continuous cycle of improvement – so they can simply absorb the gaps and provide an excellent customer experience with increased profits.
The big theme in Asia is that companies are clearly setting out to improve the lives of customers and businesses. Once successful those customers and businesses positively refer resulting in a network effect which gives incredible growth and market share. Ant Financial, Tencent and many others seem to have reached a momentum where they appear unstoppable. The incredible size and inertia of their home markets, the world-leading investment levels and the vast appetite of a modern, global consumer market expecting new levels of experience and service act like a perfect storm. So where are Google, Amazon and Facebook in this picture…well they are equally progressing but from different perspectives…these we call Unicorns!