A brief history
China is currently the largest FinTech market in the world with a population of 1.3 billion, a growing economy and a GDP of 15 trillion. The FinTech revolution in China grew out of sheer necessity. Traditional banks and other organisations were unable to keep up with the demand for access to capital from businesses and consumers.
London is where the FinTech revolution lives, in the UK, and thousands of Chinese people migrate every year to explore opportunities. The UK also boasts strong financial services all over Europe due to the presence of software experts and flexible consumers open to change. The number of FinTech companies has grown rapidly over the last five years, as London is perceived to be one of the world’s hotspot.
Just like the British, Chinese consumers have readily adopted FinTech apps that address everything from online banking, insurance, money transfer, digital currencies to easy loans. The combination of fast adaptability, size and determination together with a government that wants to control the sector makes China’s FinTech presence unstoppable in the future as it expands across the globe.
According to a recent study from accounting firm EY, 58% of Chinese consumers reported using FinTech platforms for savings and investments while 46% used FinTech to borrow money. Alibaba and Tencent are the respective owners of Alipay and WeChat Pay, the country’s most profitable digital payments services.
China has quickly become the global leader in online lending. It accounts for three-quarters of the global lending market, mostly by connecting less creditworthy borrowers to private lenders keen to generate outsized returns on their capital. Chinese FinTech companies are also moving at breakneck speeds into retail banking. Research firm Kapronasia estimates that FinTech firms will represent more than 40% of China’s potential payment-card fees by 2020, an annual loss of about $60bn for Chinese banks.
Buying and selling gold online
Today, the gold market plays a significant role in China’s economy hence making an impact on the FinTech revolution. How can gold affect the FinTech revolution in China? Gold is of great importance to many countries around the world particularly China, as one of the world’s oldest civilizations. Since ancient times, the Chinese have used gold to decorate their clothes and accessories. Gold has always fascinated the Chinese and remains a symbol of opulence.
The cultural significance of gold is evident when the Chinese turn gold into currency. An example of this is when a series of Chinese gold panda proof sets were produced and released in 1987.
With the emergence of online companies dealing with everything from online banking to digital currencies, it’s now easier than ever to buy and sell gold from the comfort of home. The explosion of mobile apps in China has made it easier for the Chinese to access services that fulfil nearly every aspect of their life.
Despite the iconic nature of gold in Chinese culture, no major player has emerged for buying gold digitally. Despite its widespread adoption and popularity, China’s FinTech revolution has not yet entered the world of gold investment.
Mobile apps such as UK based Goldex have opened doors for Chinese people to trade gold with an international marketplace. Although Goldex is only available in the UK app stores, anyone can download the app and start investing in gold for their family in the long term to protect the family’s future and in the short term to maximise returns.
Increasing gold prices
Since gold plays a significant role in Chinese culture, most of the Chinese population around the world, want to own gold. Why is that? Gold has always been the best long-form way to protect wealth for you and your heirs. It maintains value over time, through wars and other crises. Gold cannot be hacked like digital assets or erased or stolen like paper assets.
China is one of the largest gold markets globally and it’s predicted that gold prices will continue to increase as a result. Investors believe that China will continue to play a vital role in the gold market for years to come.
The FinTech revolution has changed most aspects of our daily lives for the better freeing up people’s time. Gold is included in the portfolio of the majority of Chinese and British investors, who understand the importance of diversifying a portfolio. Gold acts as an excellent hedge against inflation and recessions contributing to the expansion of their wealth.
Important disclaimer: this document is not an official research report and the views expressed in it are those of the authors. The authors are not registered research analysts and there is no assurance the trends mentioned will continue or that the forecasts discussed will be realised. Gold as a commodity is not a specified investment for the purpose of giving advice under the Financial Services and Markets Act 2000, therefore, this it does not give rise to rights to claim compensation under the Financial Services Compensation Scheme.