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Private banks in China have become a significant force in the country’s inclusive finance sector over the past decade, focusing on providing affordable and accessible financial products and services to individuals and businesses alike. A widening disparity in financial technology capabilities among these banks has given the industry leaders a distinct competitive advantage, according to industry insiders.
“Technological innovation has been the main driver behind the rapid growth of private banks over the last ten years,” stated an executive from a major private bank. “To overcome market challenges, these banks need to continue their digital transformation, especially by utilizing artificial intelligence and advanced language models, to strengthen their core systems. That’s the direction we must all head.”
Leading online private banks like MYbank and WeBank are leveraging their robust shareholder networks and extensive in-house technology expertise to attract new resources and maintain their competitive edge.
As of the end of last year, WeBank — whose largest shareholder is a prominent tech company — reported assets of approximately $90.9 billion. MYbank, backed by a major fintech firm, held assets around $70 billion. In comparison, most other private banks still operate with assets below $15 billion.
These tech-savvy banks are actively seeking skilled talent. Last year, 67% of MYbank’s staff were technology experts—meaning two out of every three employees—making it the highest proportion in the industry. Meanwhile, more than half of WeBank’s staff and other significant private banks also have strong technology teams, while smaller or less technologically advanced banks employ only about 10% tech professionals.
The difference in investment in research and development is even more striking. Last year, MYbank allocated 36% of its operating revenue to R&D efforts, whereas WeBank dedicated 7.7%, and Nanjing-based SMB invested 6%. Most smaller private banks spent only about 3-4% of their revenue on innovation.
This investment is already producing tangible results. MYbank has launched a comprehensive suite of AI tools designed specifically for micro and small business clients. “Fewer than 100,000 companies in China have full-time CFOs, but AI can now offer millions of small business owners access to professional financial advice,” explained Feng Liang, president of the bank.
Technology is also enhancing operational efficiency. Despite employing just 1,600 staff members, MYbank now serves 68 million corporate clients.
According to Liu Xiaochun, deputy head of the China Academy of Financial Research at Shanghai Jiao Tong University, all 19 private banks in China are experiencing a period of rapid growth fueled by internet finance and fintech advancements.
However, many private banks face challenges due to a shortage of physical branches and staffing, forcing them to depend heavily on digital solutions. Disparities in technological expertise and financial support from major shareholders have resulted in growing gaps in digital capabilities and overall operations among these institutions.
“We hope regulators will allow private banks greater flexibility to innovate,” said a top executive. “For example, establishing regulatory sandboxes to enable safe experimentation with new financial products and services within controlled environments.”
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