With policies tightened, technology is the industry trend

After experiencing the wave of development of artificial intelligence technology and the baptism of the market, the popularity of the "AI+" concept has gradually declined. As one of the main landing scenarios, the AI+ financial field has also gradually matured, forming three major mainstream player camps, and the overall market growth has slowed down.

In January 2020, the People's Bank of China issued the "Announcement on the Pilot Application of Financial Technology Innovation Supervision (First Batch in 2020)", using the form of a "regulatory sandbox" and sandbox tools to conduct flexible regulatory experiments on the application of technologies such as artificial intelligence, blockchain, and bank API interface openness in financial business in simulated scenarios, reducing operational risks and hidden dangers brought by technological uncertainties, and exploring better regulatory solutions under financial technology through trial and error.

Judging from the trend, supervision will continue to adhere to the policy of both tightening and innovating, maintain strict supervision on the business scope and data standards of financial technology companies, and take a prudent attitude towards new technologies and new models. Technology companies will move away from financial services business and focus more on technology output. The primitive era when the market and supervision were out of touch will never return.

Entering 2019, the form of finance + technology is no longer limited to the cooperation between financial institutions and technology companies. Taking the banking industry as an example, three of the four state-owned banks have established their own wholly-owned financial technology subsidiaries, while large joint-stock banks are relatively faster. As of 2018, a total of four large joint-stock banks have established wholly-owned financial subsidiaries, which reveals the determination of banking institutions to enter the financial technology field.

Since Alipay and Tenpay entered Southeast Asia with payment services as their entry point, mobile payment, consumer finance, micro-credit, investment management and big data risk control have become the key directions of domestic financial technology companies' external services.

In March 2019, Hong Kong issued 8 virtual bank licenses. Mainland fintech companies including Ant Financial, Tencent, Xiaomi, Ping An Technology, and JD Digits participated in the process as co-founders, mainly exporting operational experience and technological capabilities. This has provided a rare opportunity for fintech companies to supplement banking scenarios and master the closed loop of technology-enabled business. With the advantage of being an "international port", it will also provide a strong boost to technology companies' overseas expansion.

Through the statistics and forecasts of the scale of China's AI+finance-related market from 2018 to 2022, it can be seen that the total scale of the financial sector's overall information technology investment maintains an upward trend, and the investment in financial technology and artificial intelligence follows the same pace. Among them, the growth rate of the proportion of artificial intelligence investment in the overall technology investment has steadily increased, and no special values ​​have appeared, indicating that the demand side in the market has affirmed the application value of AI technology and has planned to increase its purchasing power.

Through the comparison and prediction of the scale of AI investment between Internet financial institutions and traditional financial institutions, it can be seen that Internet financial institutions are increasing their purchasing power, which is also in line with the trend of this group's transformation from financial services to technical services. Artificial intelligence technology has become an important capability in the transformation.

The following is part of the "China AI + Financial Industry Development Research Report":