Ant Financial is now ventured back into the financial services space, after a recent shift towards technology services amid increasing scrutiny from China's regulators.
The payments arm of e-commerce giant Alibaba recently closed a mega-funding round of $14 billion and has invested $120 million in a Chinese financial information service provider Xueqiu, according to a «China Money Network» report.
Beijing-based Xueqiu operates a website and an app that provide information about stock markets in the Chinese mainland, Hong Kong and the U.S. and data queries about stocks, funds and bonds.
A director of Ant, Hu Xiaodong, said that his firm will work closely with Xueqiu to provide full-cycle investment services to users to make wealth management more available and transparent.
Ant's Wealth Management Move
The move comes shortly after Ant's shift away from payments and consumer finance in the next few years, in response to the Chinese government clampdown on financial risk. With business segments spanning payments, micro lending, credit rating and wealth management, Ant is viewed by the Chinese authorities as an entity that could pose systemic risks.
As a result, Ant's revenue from financial services is projected to nearly halve to 6 percent from 11 percent, helping the company fall in line with the government’s strategy for the financial sector. In the meantime, the financial giant appears to keep its toes in financial services by taking stakes in financial service providers such as Xueqiu.
In five years' time, Ant expects technology services will constitute 65 percent of its revenue, versus 34 percent generated last year.
