China has leapfrogged the UK and US to become the ‘undisputed’ global FinTech hub, according to a new report from DBS and accountancy firm EY.

The report, which looks at China’s rapidly evolving FinTech ecosystem and examines the drivers behind its growth speed, sophistication and scale of development, suggest that China’s FinTech ecosystem has been at a level unmatched in more established markets.

It also indicates that while banks and financial services institutions in the West look at ways to incrementally innovate, China’s technology leaders are ‘revolutionising’ many aspects of financial services.

China’s lead is facilitated by the sheer size of the market opportunities present in the financial services ecosystem. At $10.9 trillion in 2015, China’s GDP already almost equates to the aggregate of the next 10 largest emerging markets.

And despite recent market movements, its economic growth continues to outpace almost all other countries. Years of sustained economic growth is swelling the ranks of the middle class, with individuals in this category set to rise from about 150 million to one billion — or 70 per cent of China’s projected population by 2030. This, the report believes, gives rise to a vast consumer base with new-found spending power and unmet financial needs.

Neal Cross, chief innovation officer at DBS, said, “The speed at which China’s FinTech landscape has developed is truly remarkable. It’s gotten this far because China’s landscape has operated in a sandbox-like environment conducive for FinTech to thrive — a strong domestic market, coupled with a constant push for innovation and experimentation driven by leading giants, unhindered by international influence.”

James Lloyd, Asia-Pacific FinTech leader at EY, added: “Chinese FinTech development is primarily characterised by the sheer scale of unmet needs and the opportunities they present. In addition, new providers are typically not constrained by the legacy infrastructure or regulations present in more developed markets.”

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