Ant Group is an affiliate company of the Chinese conglomerate Alibaba Group. The group owns the world’s largest mobile payment platform Alipay which serves 1.3 billion users and 80 million merchants. It also offers wealth management and microfinance services.
Alibaba owns a third of Ant
Ant Group is an investment firm run by billionaire Jack Ma. Among other things, it operates the largest mobile payment system in China. It also offers a range of financial services, including a digital bank and insurance products. However, it has faced regulatory pressure for the past two years.
The company, which operates a slew of e-commerce platforms including Alibaba, has been grappling with potential delisting from the American stock market. But a recent report suggests the company is on the verge of recovering from the black eye.
The company’s latest move will see it take a 33 percent stake in its rival Ant Financial. While the company’s main offering is an e-wallet known as Alipay, the company also provides a range of other products, from credit score information to rubbish collection.
Scalable and future-proof operating model
It’s no secret that Ant Group, the brainchild of Chinese ecommerce king Alibaba, is a money maker. The company provides online payment channels for more than 1.2 billion buyers and sellers across more than 200 countries. As such, it’s got to find a way to manage the cash flow. For starters, it needs to use a variety of currencies.
In order to succeed, it needs to be able to scale. Using local clearing systems enables cross-border collections at a lower cost. Similarly, it needs to be able to meet the funding needs of the various industries it serves. And it needs to be able to operate during a wide range of time frames. Lastly, it needs to be able to use a multitude of technologies to make it all happen.
Data-driven credit scoring service
Ant Group’s data-driven credit scoring service is a new tool for assessing creditworthiness. Users can check their scores through Alipay Wallet or through shopping sites. The ratings are generated from a combination of online and offline data.
According to Ant Financial Services Group, the service automatically enrolled 520 million Alipay users in the credit-scoring system. It will include credit information provided by the Huabei credit service, which is part of Ant’s financial service portfolio.
Sesame Credit uses big data technology and customer behavior analytics to create credit ratings. Similar to Amazon’s rating system, it evaluates a user’s payment history and online behavior.
Customers willingly provide personal information. Ant uses artificial intelligence to analyze transactions. A machine learning model improves its ability to predict defaults.
The Chinese government has proposed spreading social scoring across the country. The Communist Party and the central bank are both involved in this plan.
Microfinance services
Ant Group microfinance services are designed to make financial services more accessible. The company offers a variety of products, including loans, insurance, wealth management, payment processing, and other services.
As of July, the Ant Group had 1.3 billion users. It has over 100 partnerships with banks and insurance companies across the world. However, the firm’s largest business is CreditTech, a platform that provides credit to consumers and small businesses.
Although CreditTech has accounted for nearly 40 percent of the Ant Group’s income, digital payments and merchant services still lag behind. In the first half of 2019, payments accounted for more than half of the company’s revenues.
The company claims to be the market leader in its respective product lines. Ant Financial is currently the nation’s largest online microfinance provider.
Wealth management
As China’s largest digital payments service, Alipay provides a broad range of financial services to consumers and merchants. It’s also a major player in wealth management.
The Chinese government has imposed a crackdown on Ant Group, the company’s wealth management business. While the government stopped short of dissolving Ant, the company is now facing major restructuring.
As part of its efforts to revamp, Ant Consumer Finance, the company’s consumer lending arm, received a $2.7 billion capital increase on December 29. This will allow it to more efficiently handle loans for consumers.
In the past year, the company issued 250 billion yuan in consumer loans. Its consumer lending balance was 21% of all short-term consumer loans issued by Chinese deposit-taking financial institutions.
Aside from its consumer lending business, Ant also operates the world’s largest money market fund. Currently, the Yu’ebao fund has generated returns for over 160 million users.
