In keeping with the nation’s ambition to be the world’s banking leaders, the Industrial and Commercial Bank of China have created a new fintech research enterprise. The ICBC Information and Technology Co., Ltd (ICBC Technology) subsidiary, located in the Hebei Xiongan New Area, commenced operations last week (May 8th) and is reportedly holding a 67.3 million GBP fund.
It’s sudden appearance is a strategic measure from the Industrial and Commercial Bank of China in preparation for their own smart bank, currently under construction. ICBC Technology will focus on software and product innovation most pertinent to ensuring their banking offer remains abreast of competition. This initiative builds on the bank’s foundation of openness and considered by the firm as “an important pillar for the Bank’s open transformation of its business and IT infrastructure”.
Founded in 1984, the ICBC is the world’s largest financial institution by total assets ($4 trillion), deposits, loans, number of customers and number of employees. It is one of China’s “Big Four” state-owned commercial banks (the other three being the Bank of China, Agricultural Bank of China and the China Construction Bank). The creation of ICBC Technology is therefore not just a FinTech drive by the ICBC but is an innovation drive implemented by the Chinese state.
This inner-innovation drive by the Chinese state could be a way for the country’s financial regulators and government actors to go into the FinTech industry. In February, China reportedly seized $1.5 billion from online lenders. China’s policy investigated 380 online lenders and froze $1.5 billion in assets in a crackdown following an avalanche of scandals in the huge but lightly regulated industry.