Banks are investing huge sums to keep their digital platforms up to speed with those of China’s tech giants, writes Brian Caplen.

Amazon has announced the closure of its China business that enabled consumers to buy from domestic sellers and has decided to focus instead on its cross-border operation. The US company found it difficult competing against local giants such as Alibaba and

That Amazon struggled against domestic competition is unsurprising given the way logistics and retail payments are moving ahead in China. Same-day delivery, or even within hours, is common in Chinese cities with consumers using mobile apps WeChatPay and Alipay to make payment. Consumers can also fund themselves by way of an app, thus making the credit card a rather old-fashioned concept in China.

Pushing this revolution forward are Chinese consumers who are more open to new technology than their Western counterparts and less concerned about privacy and sharing of data.

Take face recognition, for example, which is already being used by banks and some supermarkets for security authentication but could now be developed to detect facial expressions and emotions. Banks could detect whether a loan applicant was being truthful about income and supermarkets could use it for discovering the mood of their shoppers. Applications of face recognition do not stop with humans. is experimenting with face recognition on pig farms as a way of monitoring food intake and improving husbandry.

Other ideas being worked upon by China’s banks are unmanned call centres using voice recognition, and advanced wealth management robotics to give help and advice. Whereas Western consumers often consider these kinds of services dehumanising and invasive, Chinese consumers are generally more comfortable that the overall security of the system is being strengthened by better monitoring. As a result, China’s analytics companies have lots of data to play around with, are becoming ever more sophisticated and may lead the field globally at some point.  

In China, the payments revolution was led by the tech companies. Spurred on by their success, banks, which traditionally paid more attention to the corporate rather than the retail customer, are now investing huge sums in catching up fast.  

Brian Caplen is the editor of The Banker. Follow him on Twitter @BrianCaplen

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