The five biggest fintech trends of 2021

5. China fintech’s disappearing act

When the Ant Group IPO got kiboshed in November 2020, it was clear that fintech, and Big Tech generally, was in for a rough ride. That expectation proved more than true in China. The giants such as Alibaba and Tencent, having built an incredible, world-changing fintech universe, have been transformed into infrastructure. The advancement of China’s digital yuan continues apace to ensure the government, not two tech companies, has control over money.

Taken in isolation this was arguably a necessary corrective. The real shocks came from Didi Chuxing. The ride-hailer listed for $4.4 billion in New York in June, apparently ignoring warnings from regulators not to. The reaction was swift. Didi is now delisting while Beijing is imposing new regulations around data protection.

Innovation continues apace in China: the tech crackdown hasn’t stopped VCs funding startups. The focus is no longer on consumer internet or fintech, however. In line with China’s inward turn as a defense against COVID, and its “dual-circulation” economic strategy to promote “common prosperity”, its deep tech companies are turning more to mining the country’s huge population for data to fuel its artificial intelligence, 5G, IoT, and super-computing industries.

Alibaba, Tencent and other big tech companies remain massive investors in startups across Asia. Don’t be fooled by the fact that China’s once high-flying execs may now be lowering their profile (and it’s hard for anyone to travel in and out of China these days): they remain titans of Asian technology and innovation, including fintech. But China’s domestic fintech industry went dark this year.

For glimpses into what’s next, Hong Kong’s integration into the (Shenzhen-led) Greater Bay Area may offer insights into where Chinese fintech is headed.