Ant Group represents the global technology and financial system, and it is the advent of a new financial era. Ant Group provides customers with a full range of service platforms such as online payment, digital finance, and digital life through payment insurance. Revenues mainly come from four major businesses, online payment and merchant services, microfinance technology platform, wealth management technology platform, and insurance technology platform. The younger generation uses mobile phone screens to replace physical banknotes and currency. During the epidemic, digital payments have increased. The user groups are mainly ordinary people and students. Ant Group will not only do Tech in the future, but also help financial institutions to do Fin. In addition to the financial sector, more emphasis is placed on technology and digital life services.
However, Ant Group IPO in Shanghai and Hong Kong is suspended, the news sent shockwaves through the financial world. The reason of this suspended is The Shanghai exchange notice the significant change in financial technology regulation related to online lending. The Ant Group's business covers all over the world, and his IPO impact and risk:
Financial System supervision
Ant Group IPO may challenge the traditional banking system. Once the company market capitalization worth around $310 billion, which comparable to the largest financial institution JPMorgan Chase. Ant Group fintech is like squeezing all the major banks, Wall Street brokers, several major asset management companies and insurance companies into one mobile application, and almost everyone uses it. However, Fintech companies do not face the same regulatory scrutiny, like financial institutions.
In addition, the Ant Group’s micro-loans have accumulated more than 2.1 trillion yuan. The loan business in China is very strictly regulated; however, Ant Group which is known as a technology company is not subject to financial regulations. If the rapid growth in loan business, and then collapses. It will indirectly affect China's financial stability.
The high profits of the loan business obtained by the Ant Group, the high-risk and unprofitable ones will be left to traditional banks. Therefore, if the financial system has no obvious divisions and will become very unstable. Nowadays there is no compliance with regulations and laws to supervise. Which will endanger the living space of traditional banks and affect financial disorder.
Privacy
Fintech platform companies have the potential to become a tool for a country to monitor, manipulate, and attack the people. Therefore, it is the biggest concern of regulators to protect the personal data of users. Law and regulatory of various countries may require more supervision of related companies. To ensure the privacy of their own citizens and make their best efforts and upgrade their system monitoring to avoid infringement of privacy rights.
Ant Group, Jack Ma criticized China’s state machinery’s financial regulations outdated which were stifling innovation in the sector. The IPO of the Ant Group just made all users and participants to think about the legal regulations for these fintech companies, which to separating their business category in technology and finance. Personal privacy and fund security, etc., need to be fully controlled. As an enterprise must have the principles of marketization, rule of law, and internationalization, respect international consensus and rules, and support the development of the real economy.
