What’s in a name? Apparently, a lot – if you are dealing with Chinese regulators.
Ant Financial Services Group has won a green light from Chinese regulators to drop the word “financial” from its name, so it’s goodbye to Ant Financial Services Group and hello to Ant Group, The Wall Street Journal reports.
The Alibaba affiliate, which will now be known, at least in business records, as Ant Group, decided its name was due for an overhaul as the big FinTech began attracting growing scrutiny from China’s financial watchdogs.
In its previous incarnation as Ant Financial Services, Ant found its ambitious growth plans were hampered by efforts of Chinese financial regulators to keep its expansion in check.
Ant was launched in 2014 by Jack Ma, founder of Chinese tech giant Alibaba, whose personal net worth is over $42 billion, making him the world’s 17th richest person, according to Forbes.
The new company was formed out of Alipay, which Ma pulled out of Alibaba and combined with other financial services, raising more than $14 billion from investors in 2018 for the new venture.
However, when Ant created the world’s largest money market fund, the FinTech found itself under pressure to reduce the size of the fund, which had become too big to fail without potentially causing a major crisis in the Chinese financial system.
As 2018 gave way to 2019, the fund – Tianhong Yu’e Bao – had ballooned to more than $168 billion. With 588 million different investors, more than a third of China’s population had a direct stake in the fund, The Wall Street Journal reported previously.
Since then, Chinese financial regulators have forced the newly renamed Ant Group to reduce the size of its fund, while also rolling out other rules, such as requiring third-party mobile networks to keep most of their funds in commercial banks and to clear transactions through a platform controlled by the government.