Tencent Cloud has formed a strategic partnership with a fintech software developer to provide cloud solutions to major banks in China. The move will put Tencent Cloud in direct competition against Alibaba Cloud, which claims 18% market share in the financial cloud computing sector, at a time when regulations that govern the private fintech sector are becoming more stringent.
Tencent will collaborate with Yusys Technologies to develop a data center and design a system for online loans for banks, according to an announcement released on Tuesday. Yusys Technologies is an IT solutions company that offers mobile banking and internet finance services to more than 150 banks in China, including the central bank, People’s Bank of China (PBoC).
By utilizing Tencent’s cloud computing infrastructure, Tencent Cloud and Yusys will improve the data analysis abilities of banks and set up credit evaluation systems that can process a variety of scenarios. The move is meant to meet banks’ needs for proprietary financial technologies, Tencent and Yusys said in the announcement.
Tencent Cloud and Yusys didn’t reveal the details of their new collaboration in the announcement. Neither company replied to KrASIA’s request to comment via email. In the past two years, the two firms have formed partnerships to provide consulting services and loan review systems for rural banks with limited customer bases.
China’s fintech sector is undergoing fundamental changes as regulators redefine their operational scopes. Meanwhile, conventional financial institutions are being transformed by incorporating systems developed by fintech firms. Last month, Ant Group’s online lending business began sharing financial data of its 500 million users with PBoC and became part of China’s credit scoring system.
China will support the collaboration between tech companies and conventional financial institutions to empower the digital transformation and development of financial institutions, Wang Zhaoxing, a counselor of the State Council said at a fintech forum in September. Regulators will keep an eye on the space to prevent anti-competitive practices and protect data security, Wang said.