China CITIC Bank and Baidu, China’s leading internet search company, announced Saturday (Nov. 18) the launch of a new direct banking joint venture.
According to news from Reuters, the new joint venture, dubbed AiBank, is aimed at getting into China’s fast-growing FinTech market. China CITIC Bank and Baidu are following in the footsteps of other technology and financial companies that have joined forces to launch FinTech businesses. Alibaba and Tencent have created their own financing businesses that cover everything from digital payments to online trading.
As Reuters noted, AiBank will provide online lending to consumers and small businesses, while using big data and artificial intelligence to vet credit risk and create new assessment models. At a launch event covered by Reuters, Li Rudong, president of the new bank, said 60 percent of the new company’s staff will be comprised of technology workers.
CITIC Bank owns 70 percent of the joint venture, with Baidu holding the remaining 30 percent stake. The direct bank has registered capital of 2 billion yuan, noted the report.
“AiBank is the future of intelligent finance … It is an institution that understands customers best and understands finance best,” noted Baidu’s COO, Qi Lu. Baidu has been inking new partnerships in recent weeks as it seeks to grow and diversify its business.
Baidu has also been making new alliances in search; in August, it reached a deal with Chinese eCommerce company JD.com. According to an August report in Bloomberg, users who are looking for product information on Baidu’s mobile search app will be able to access a section in which they can purchase products directly from JD.com. Baidu gets to keep users within the app and also gets its share of valuable data about customers’ likes and dislikes.
“Baidu can use its advantages in information to help JD greatly shorten the time between spotting an item to actual purchase,” Baidu said in a statement to Bloomberg. “This improves efficiency [and] reduces marketing costs, but also enhances the shopping experience.”