Why tech companies are flocking to fintech
Fintech is becoming a data industry. Alibaba’s Ant Financial is the largest fintech firm in the world, but Yuan (Alan) Qi, its vice president and chief data scientist, thinks the term “fintech” doesn’t aptly describe the company anymore. He said it might be more appropriate to call Ant Financial a “techfin” company instead, given its intense research focus on AI.
This is because every service ends with a transaction and broadens the amount of information that can be collected. For example, Go-Jek and Grab can now paint a vivid picture of users’ movements, schedules, and even financial habits.
Venturing into fintech also positions companies to expand their understanding of customers and improve their non-financial products and services. For example, Sea cleverly leveraged its successful gaming brand Garena to target the fast-growing market of gamers for their ecommerce services. You can bet that it is also feeding back the data mined from its ecommerce platforms to serve users relevant in-game advertising.
Finally, tech companies that go into fintech can open up new revenue streams by selling information to third parties. Even if startups have a niche or small group of customers, the data will be valuable to other players in the market.