Hu Xiaoming — “Fintech Innovation Trends in the Digital Age”
Ant Group CEO Hu Xiaoming delivers a keynote speech titled “Fintech Innovation Trends in the Digital Age” at the “in clusion” Fintech Conference in Shanghai, Sept 24, 2020.
Hu believes that the new financial system’s core facing the digital era relies on intelligence, cloud computing, database and blockchain. Through such a system, we can build a new technology-driven finance. What’s more future financial innovation must be driven by technology, and future financial development must be escorted by science and technology.
If blockchain builds trust in the digital age, cross-chain technology is what allows that trust to flow across the Internet, he said. Cross-chain is the foundation and root of ten-thousand-chain interconnection. It can make digital assets flow and integrate better and generate greater value better. Blockchain is an important technology to promote future technological change and the integration of financial services and supply chains.
He stressed that only through scientific and technological innovation can we make financial services more inclusive, and solve the problem of more unequal services, which enable finance to provide services for more women, young people, entrepreneurs and people in poor areas, as well as provide more corresponding services for developing countries. When Ants Group being listed in the future, the most important thing is to invest in technology. Ant group will further improve its independent innovation capability and continue to increase investment in blockchain, IoT, AI, security risk control and other fields, so as to lay a good technological foundation for its long-term strategy.
Following is the full text of the speech(translated by Yang):
Distinguished guests, developers who are watching the webcast now, friends from the financial industry, good morning!
Today reminds me of the town of Yunqi in Hangzhou. Ten years ago, we held a Aliyun developer conference in a small town called Yunqi in Hangzhou. Five years ago, we changed the name of the conference to Yunqi Conference. After 10 years of being led by Academician Wang Jian, today’s Yunqi Conference has become a global scientific and technological event. Its success is not because of Aliyun, but because of Hangzhou’s vision of the digital economy, which enabled Aliyun and Hangzhou to seize this opportunity in the process of transformation and upgrading in China.
We also hope the Conference today will become the world’s top technology event. Not because of Ants, but Shanghai’s faith in fintech. We believe that this era needs a platform for communication, where developers and technology-driven forces can communicate and share AI and finance.
As our theme today (Technology makes the Future more Universal), from China to the world, a digital revolution driven by fintech is taking place. Since the COVID-19, revolution has accelerated, and it is changing many aspects of finance, transforming everyone’s lives. So in this epidemic situation, all consumers have become online participants, and all their eating, drinking and playing has been shifted online.
From our point of view, London became the first international financial center in the 17th and 18th centuries by virtue of its advantages in navigation and trade. Similarly, in the 19th century, the power of capital enabled Wall Street to make New York the new financial center of the world. But in the 21st century, because of the power of finance and technology, I believe Shanghai has the opportunity to become the next global financial center. So the new financial system’s core facing the digital era relies on intelligence, cloud computing, database and blockchain. Through such a system, we can build a new technology-driven finance. What’s more, the financial center of the future must be the center of science and technology.
In the new era, the financial system has put forward new demands for innovation, like scenario-based and personalized business needs, and the requirement of financial institutions to provide more sustainable intelligent services. Similarly, the increasingly complex and comprehensive digital transformation and upgrading also require financial services to be more secure and reliable. Not only consumption is on the Internet today, but services and manufacturing too. So we have to think about how edge computing and IoT can make finance safer. Similarly, urban management is also on the Internet. So there needs to be a safer, more credible system across the financial system. Therefore, the new problems caused by the unbalanced global development also require that fintech be more inclusive, greener and sustainable. In response to new development demands, we see that global fintech is entering a new era of credibility and intelligence.
Today financial intelligence is becoming a reality. On Alipay, AI can customize different accounts for everyone, for example financial decisions, and your credit can be regarded as your wealth. It can also recommend a suitable investment portfolio according to your risk preference. Behind that is the deep integration of AI and financial scene, so AI is the core technology field of Ant. Here, I want to share some cases with you.
Today we are facing the challenge of data sharing. In our opinion, data can not be shared, but the value of it can. Based on privacy protection, sharing smart technology integrates multiple sources of information, which also makes data available but invisible, and enabling tech companies and banks to work together to innovate financial systems.
In our cooperation with banks in the credit union business, and the banking system through multi-party joint modeling, makes the Ant scene data can be used as production materials for small and micro enterprises’ credit and liquidity risk assessment. In terms of risk identification, we have also built a security network through joint cooperation with partners to greatly improve the accuracy of risk identification.
The essence of finance is risk management, and we need to keep dynamic financial risk prediction. Therefore, we launched the timing diagram intelligence, and add the timing sequence intelligence technology on the basis of the graph intelligence, so as to make the mapping of enterprises more comprehensive and more implemented, and this also provides accurate decision-making services for risk control. Ant Group has also launched a financial-level distributed graph database and established a super-scale map of financial knowledge, which supports trillion-edge graphs, data, reasoning and deep learning training, and can realize second-level decision-making in graph computing performance. Therefore, in today’s cooperation between small and micro businesses and consumer credit and banks, our risk management is 7×24 hours and 365 days for real-time dynamic risk control. Such technology is not only used for credit risk assessment, but also for intelligent decision making, anti-money laundering and intelligent claims settlement.
Let’s look at the 310 credit line of the online commercial bank. We serve 20 million small and micro businesses and operating farmers in one year. Under the black Swan event of the epidemic, our small and micro businesses have obtained loans through The Alipay platform. Even under the current situation, their compliance rate has exceeded 98%. Behind this is the sequence diagram database. With the technical support of multi-modal intelligent modeling and multi-party safe calculation, we carry out dynamic risk management all the time of lending. This figure of 98% also proves that small and micro enterprises do not lack trust, but lack the technology to discover their trust, and lack the continuous dynamic risk management. That’s the value of the technology we’ve been investing in for years.
The new generation of machine learning can realize self-adaptation and self-learning with zero artificial intervention. We can greatly improve the level of intelligent decision making in multiple financial application scenarios. In the areas of security and credit risk control, credit access, and insurance claims, we automatically learn and recommend strategies to improve risk control. In the field of quantitative investment and research in wealth management, through feature discovery, model interpretation and continuous modeling, we can realize automatic data analysis and recommendation at the level of tens of billions, which can increase the accuracy of investment by 11%.
Vanguard, the world’s largest intelligent investment consulting company, joined with Ant Group and Alipay, and then founded a company called “Bang Ni Tou”. With this kind of smart technology, in the first 100 days, we provided smart investment services for 200,000 users in China. That’s one of the highest growth rates in the world. Vanguard has also decided to close its investment banking operations in the rest of Asia, but all in China. So today, with Shanghai as the center, we have provided many consumers with intelligent investment and financial services through the Internet. Although China’s financial management market starts relatively late, we believe that the rapid development of AI, data capability and scientific and technological capability will enable the smart investment clients representing the future to enter the homes of ordinary people.
Similarly, the widespread use of new technologies such as AI can make fintech much more productive. Therefore, our comprehensive digital transformation puts forward higher requirements for financial credibility and security.
If blockchain builds trust in the digital age, cross-chain technology is what allows that trust to flow across the Internet, he said. Cross-chain is the foundation and root of ten-thousand-chain interconnection. It can make digital assets flow and integrate better and generate greater value better. Ant chain has realized 1 billion account scale, 1 billion transaction volume daily, and 100,000 cross-chain information processing every second. It formed a multi-scenario cross-chain service from supply chain, cross-border trade, logistics finance to rural finance, etc. Today’s online developers and financial peers must pay high attention to blockchain, which is a very important technology to promote the future technological change and the integration of financial services and supply chains.
In the future, the intelligent world also puts forward higher requirements for security. Therefore, in the face of dynamic changes in risk forms, financial security has moved to the active patrol mode, end-cloud linkage mode, and the active defense mode of confrontation game. Ant intelligent decision engine Alpha Risk conducts real-time dynamic scanning of a large number of transactions on Alipay every day for 7×24 hours. In less than 0.1 seconds, it can identify the risks of the entire transaction. This also explains well that future financial innovation must be driven by technology and future financial development must be escorted by science and technology.
Green sustainability & Public interests
The development of science and technology has not only brought smarter and safer financial services, but also gradually cracked the difficult problem of green sustainability.
In the past four years, 550 million people have planted trees by Alipay, reducing carbon emissions by 12 million tons, and planting and maintaining 220 million real trees in the desert. We have planted an area the size of two and a half Singapore. Through the power of tech, this product connects finance and public interest.
Not only in China, during the epidemic, we also pushed more fintech technology to the developing world. In Bangladesh, our partner Bkash, is using fintech to help 1.5 million textile workers, especially women, get subsidized by the government to survive at home with their mobile phones. After the epidemic, Bkash also launched an immunization health insurance, helped pay salaries and so on, aiming to help these people restart their lives.
For 16 years, technology has been driving Ants, constantly innovating and evolving our business through technology. Since we launched Alipay in 2004 to solve the problem of online shopping trust, Alipay has now become the world’s largest fintech application platform. In 2010, we have invested in the intellectual research and Oceanbase’s database, which supports all the business of Ant Group. In 2015, we invested in the blockchain. Through five years of research and development, we have maintained a leading position in patents, technical performance and application technology, and upgraded to ant chain this year.
Facing the future, Alipay’s technology strategy is not a 100-meter sprint, but a continuous marathon.
When Ants Group being listed in the future, the most important thing is to invest in technology. Ant group will further improve its independent innovation capability and continue to increase investment in blockchain, IoT, AI, security risk control and other fields, so as to lay a good technological foundation for its long-term strategy.
The digital stage is just beginning, so the future of fintech is full of imagination. We believe, in the future, financial depends on not only capital and the license plate, but mostly on data, scientific and technological innovation. Only through scientific and technological innovation can we make financial services more inclusive, and solve the problem of more unequal services, which enable finance to provide services for more women, young people, entrepreneurs and people in poor areas, as well as provide more corresponding services for developing countries.
We firmly believe that technology is the core and most important engine driving financial innovation. That’s why we hope to continue to communicate with you through the this Conference, and we hope to share these capabilities and our judgment of the future with you.