BankTech

Daily Review: Baidu – The Emerging Behemoth of the Financial World

MEDICIGlobal Head of Content

Baidu has an unfair advantage over any international counterpart. It’s a legacy technology company in the largest consumer market in the world, which translates into an ownership over an asset that underlines the leadership in at least two worlds – the financial services industry and the world of AI. That asset is data. It was only a matter of time when Baidu took formal steps towards leaving a footprint in the FinServ industry, and now, the search giant is sourcing funds to establish its own financial unit.

Pick #1. Chinese Search Engine Baidu Is Raising $2 Billion to Take on Alibaba & Tencent in Financial Services

Chinese search engine Baidu is seeking new investors for its wholly-owned finance unit, in a deal that could fetch up to $2 billion and deepen its push into financial services. Baidu FSG runs payment system Baidu Wallet, an online credit service and wealth management platform. By beefing it up, Baidu is attempting to narrow the lead that its Chinese rivals Alibaba and Tencent have forged in financial services. Baidu FSG plans to use part of the proceeds to be raised to invest in several domestic financial institutions, such as trust firms.

Baidu Wallet, which also attracts users for other financial services such as online credit, had 100 million activated accounts as at the end of 2016. It is currently far behind its rivals Ant Financial and WeChat Pay in mobile payments in China.

The fundraising also comes amid a wider reshuffle of Baidu’s corporate strategy as it looks for new revenue streams outside of its core search business.

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Pick #2. China Wants to Make the Chips That Will Add AI to Any Gadget

In an office at Tsinghua University in Beijing, a computer chip is crunching data from a nearby camera, looking for faces stored in a database. Seconds later, the same chip, called Thinker, is handling voice commands in Chinese. Thinker is designed to support neural networks. But what’s special is how little energy it uses – just eight AA batteries are enough to power it for a year. Thinker can dynamically tailor its computing and memory requirements to meet the needs of the software being run. This is important since many real-world AI applications – recognizing objects in images or understanding human speech – require a combination of different kinds of neural networks with different numbers of layers.

In December 2017, a paper describing Thinker’s design was published in the IEEE Journal of Solid-State Circuits, a top journal in computer hardware design. For the Chinese research community, it was a crowning achievement.

The chip is just one example of an important trend sweeping China’s tech sector. The country’s semiconductor industry sees a unique opportunity to establish itself amid the current wave of enthusiasm for hardware optimized for AI. Computer chips are key to the success of AI, so China needs to develop its own hardware industry to become a real force in the technology.

China’s AI companies are increasingly developing their own hardware.

“In the future, companies that only make chips may be fewer and fewer,” says Fengxiang Ma, Director of ASIC Design at Horizon Robotics, a Beijing-based startup focused on applying AI techniques in driving and cameras.

In December 2017, Horizon released two computer vision chips. They can be used to enable vehicles to recognize pedestrians or help shopping malls find patterns in visitor traffic.

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Pick #3. WeChat Pay Now Allows Users to Bind Overseas Credit Cards

Expats living in China and residents of Hong Kong, Macao, and Taiwan – places where WeChat is ambitiously expanding its user base – can now bind and activate WeChat Pay accounts with credit card services provided by Mastercard, Visa, and JCB. This is the first time that users are able to use WeChat Pay without having a Chinese bank account or credit card.

WeChat Pay is popular among the expats living in China, to say the least – over 64% of foreign expats in China used WeChat Pay for their daily needs.

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Pick #4. South Korea to Ban Cryptocurrency Traders from Using Anonymous Bank Accounts

South Korea will ban the use of anonymous bank accounts in cryptocurrency trading from Jan. 30. Starting Jan. 30, cryptocurrency traders in South Korea will not be allowed to make deposits into their virtual currency exchange wallets unless the names on their bank accounts match the account name in cryptocurrency exchanges, Kim Yong-Beom, Vice Chairman of the Financial Services Commission, told a news conference in Seoul.

The measure comes on top of stepped up efforts by Seoul to temper South Koreans’ obsession with cryptocurrencies. South Korea’s Presidential office has clarified that an outright ban on trading on the virtual currency exchanges is only one of the steps being considered and not a measure that has been finalized.

“Everyone knew this was coming, as the government already said they will enforce the real-name system before. Rather, I can see this as a chance to go in, not out. I don’t see any reason to take my money out,” said a local Bitcoin investor who only agreed to be identified by his family name Ahn.

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Elena Mesropyan

MEDICIGlobal Head of Content

Global Head of Content, MEDICI

Elena is a research professional with a background in social sciences and extensive experience in consumer behavior studies and marketing analytics. She is passionate about technologies enabling financial inclusion for underprivileged and vulnerable groups of the population around the world.