Chinese internet giant Tencent has officially launched its WeBank mobile platform as it makes a push into mutual fund sales and pension insurance products.
In partnership with three fund houses and one insurer, Tencent hopes to use China’s first private internet bank to emulate the financial technology (fintech) success of rivals such as Alibaba.
Tencent will now push fund distribution via WeBank, which will be combined with its huge big-data resources including online retail customers’ records.
WeBank soft-launched its digital platform last Saturday (August 15), seven months after the bank was set up in January this year. Although it is called an internet bank, the online platform will initially provide just wealth management products and savings accounts.
The digital bank is now set to become a new distribution channel for fund companies. On its wealth management platform, the bank has teamed up with China Universal Asset Management and Bosera Funds to distribute six actively-managed mutual funds, including three equity strategies, two mixed asset strategies and one investing in overseas equity via the qualified domestic institutional investor (QDII) scheme.
It also offers cash-management functions which link to financial products. WeBank’s short-term savings product links to a new money market fund (MMF) managed by Gfund Management, while its three-months savings product links to a pension insurance product managed by Taiping Pension Company. Gfund’s new MMF will use WeBank as its exclusive direct sales channel.
Zheng Xinlin, WeBank vice-president, told media that the firm had been preparing the app for eight months, but the services offered were currently limited because the government had not yet released details of the upcoming digital bank management rules.
Celent, a technology consultancy, noted that WeBank’s business model had two key features: scenario-based services and big data. In its scenario-based channel model, WeBank’s banking services are likely to be embedded into other services, including entertainment, online education, healthcare, and travel.
Zhang Hua, Beijing-based analyst at Celent, noted in a report in April that WeBank’s big-data system – TDBANK - owns more than 40 trillion records from retail customers, and will allow WeBank to provide new banking services.
Presently, Tencent offers fund distribution via social media app WeChat’s LiCaiTong, which has a function embedded with Tencent’s mobile payment system Tenpay. LiCaiTong has teamed up with four fund companies - E Fund, China AMC, ICBC Credit Suisse Asset Management and China Southern Asset Management - to offer six index funds since May.
Chinese e-commerce giant Alibaba was granted a licence to set up its own internet bank – MYbank - in September last year.