November 8, 2016
Ever since technology companies started acting on their interest in the financial services industry, it became clear that one does not really need to turn to a conventional bank to receive financial services. Previously silent witnesses of the action are now an aggressive competition to traditional players. But while the Western world was (and is) busy watching FinTech and GAFA in that regard, the real Grey Cardinal has emerged in Asia and has spread wings to another side of the world this year.
Asia’s top company by market capitalization, Alibaba, valued at over $260 billion, is one of the most interesting cases of a multi-profile company that has been developing a foundation for offering complex financial products for years and is probably ready to substitute traditional banks. The story with Alibaba is probably somewhat similar to the story with Facebook, but Alibaba is probably a couple of steps further.
Alibaba was always important in Asia – it's the hallmark of the region, one of the most important elements of its ecosystem. However, prior to 2016, Alibaba and its affiliates were not as big of a threat to FinTech or banking in Europe and Americas because the company was mainly contained in Asia and invested time and funds into dominance in the region.
For example, last September, Alibaba Group and affiliate Ant Financial have become the largest shareholders of One97 Communications, the parent of Indian etailer Paytm, by investing $680 million, underlining the ambition of the world's largest e-commerce company to gain a stronger foothold in the country's surging Internet retail space. With this investment, Alibaba Group gets access to Paytm banking business and bank tie-ups that Paytm is actively working on.
But let's put Alibaba’s activities in Asia aside, as those are not the most interesting things to know right now. The series of important strategic expansions that happened this year and the previous year took Alibaba to a whole another level. At the end of 2015,