If You Doubted FinTech Revolution, Look at This China Infographic

In his annual letter to shareholders, JPMorgan CEO Jamie Dimon had warned investors and those in the banking industry that the Silicon Valley is coming.

In 1997, Bill Gates had said, We need banking but we don’t need banks.

Yet, there are a lot of people who still don't believe that FinTech can have any major impact on banks. Today, there are more naysayers than believers in the coming disruption of banks. Luckily, we have a great story based on data that we can show you. Have a look at this infographic that shows the extent of damage done by Alipay and the likes in China. If you didn't believe that FinTech was going to disrupt banks, think again!

The smartphone has now been declared as the universal weapon of revolution by FinTech firms across the world. Countries with high smartphone penetration will surely witness the rise of FinTech firms. In China, smartphone penetration has reached more than 50%. In the case of urban population, the penetration level has crossed 65%. High smartphone penetration and usage inculcate frequent accessing of the Internet via mobile devices, which again result in more purchases through smartphones. This is exactly what’s happening in China. The third-party mobile payments industry in China has seen a stupendous growth in the last three years. Currently, the value of mobile transactions is so high that it is almost double the value of transactions through checks.

Here is an infographic on the FinTech revolution in China:

A recent report from the PBOC (People's Bank of China) indicates that the transaction value of checks is decreasing by 29% y-o-y. At present, it is around 6% of all the non-cash transactions, whereas mobile payments, which kick-started in 2009, stand at around 11% of the total non-cash transactions. All the FinTech mobile payments companies are witnessing phenomenal growth in transaction volume, whereas traditional systems are getting a hit. Alipay, the largest FinTech player in terms of market share is processing transactions which are around 2.6 times ICBC’s credit card transactions and 3.7 times CMB’s credit card transactions. (ICBC is one of the largest state-owned banks in China and CMB is another major bank in China). What we should not forget is that China is a country where banks used to dominate the financial space; the rise of FinTech and challenging the traditional systems is worth applauding.

Today, I feel many naysayers will start believing that FinTech has enough potential to cause disruption and will have a strong impact on the global financial industry in the next couple of years.