The sector is expected to drive deals, as leading fintech players continue to make domestic acquisitions as well as increase overseas acquisitions and partnerships. After achieving success domestically, a number of large fintechs — primarily from China — have set their sights on Southeast Asia as the next step in their growth agenda. Chinese fintechs’ international aspirations should create opportunities for Western incumbents to forge partnerships and JVs.
As virtual banks emerge in Hong Kong (SAR), internet banks should continue to bloom in mainland China, with strong, tech‑enabled growth focused on retail and small enterprise loans. The Hong Kong Monetary Authority (HKMA) has unveiled the first batch of licenses in early 2019. The development of virtual banks is set to accelerate the application of fintech and innovation in Hong Kong (SAR) and offer a new kind of customer experience, as part of a broader ambition to become a smart city.
In a break with the past, Chinese banks are starting to recognize the value of support — particularly from local partners — and are shifting from their traditional strategy of controlled acquisition. Banks are willing to acquire 50–60 percent control but are also eager to retain local partners to help navigate their respective countries, creating opportunities for financial institutions looking for partnerships/JVs in 2019.
"Chinese fintech is going global." - Louis H.C. Ng, Partner, Deal Advisory Financial Services in China.