OneConnect Financial Technology, a cloud-based fintech platform controlled by Ping An Insurance (Group), expects to see “accelerated growth” in Southeast Asia as the Covid-19 pandemic spurs demand for digital banking services among regulators and institutions for its products and services.
“Our new expansion pace in the region would be faster,” said Michael Fei, board secretary of OneConnect, pointing out that before the outbreak OneConnect had secured nearly 50 clients in 10 Southeast Asian nations within a year. “We have quite a few orders from the clients there in the pipeline.”
The New York-listed company last week raised US$356.4 million from a follow-on sale of 20.7 million shares, which it plans to use to expand overseas, strengthen new product development and for strategic investments.
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OneConnect, one of Ping An’s many businesses backed by SoftBank Group, provides technology solutions that help to increase revenue and manage risks for firms and financial watchdogs.
The China-based company positions itself as a pure SaaS (software as a service) business which, via cloud computing, enables enterprise clients to use a range of software and other digital resources as an on-demand service, cutting their costs and boosting efficiency.
Unlike Ant Group – an affiliate of Alibaba Group Holding, which also owns this newspaper – that is expanding outside the mainland by serving individual consumers with its own financial technologies, OneConnect focuses on supporting corporate clients and regulators in the overseas markets as a technology solutions provider.
Southeast Asia, Hong Kong and Japan are currently the three major overseas markets targeted by OneConnect, Fei said.
“Given the rising mobile phone penetration in Southeast Asia, we believe that the market, five to 10 years behind the mainland, has strong demand for financial technologies (fintech) and gives us great opportunities to tap,” he said. “The Covid-19 is ushering in increasing orders for our products, such as AI-based call centre technologies and operations support service.”
Fei pointed to Indonesia’s potential where the number of smartphone users is growing by about 10 million a year.
Yin Ran, a Shanghai-based angel investor in tech businesses, said OneConnect should make expansion overseas a priority. “Expanding abroad is also a good choice for OneConnect because overall, China is a front runner in digitalising banking services and has abundant know-how and experience.”
For the first half of 2020, sales derived from Ping An’s in-house businesses made up 45.7 per cent of OneConnect’s total. Revenue from third-party customers jumped 38.5 per cent to 557 million yuan (US$80.5 million) in the same period.
The company’s losses however for the six months to June stood at 746 million yuan, nearly unchanged from 755 million yuan a year ago.
Despite this, OneConnect’s shares have surged 115 per cent year to date, closing at US$21.57 on Friday.
More from South China Morning Post:
- Fintech unicorn Lufax, backed by China’s biggest insurer, Ping An, said to be secretly applying for US IPO
- Hong Kong government has ‘not been bold enough’ in nurturing fintech development, says WeLab Bank chairman, former finance secretary Chan Ka-keung