Future FinTech Group Inc. (NASDAQ: FTFT) (“Future FinTech”, “FTFT” or “the Company”), a leading blockchain e-commerce and financial technology company, today announced it plans to enter the challenger bank and digital payment sector.
Challenger banks are small, recently created retail banks that compete directly with the longer-established banks, sometimes by specializing in areas under served by the big traditional banks. The challenger banks distinguish themselves from the historic banks by modern financial technology practices, such as online-only operations without physical retail stores, which reduce the banking costs and avoid the complexities of traditional banking. In order to be defined as a “bank”, it must be regulated by the banking regulatory authorities.
In recent years, challenger banks and third-party payment systems have grown rapidly worldwide, rising to the top of the financial services industry, with personalized banking services that have reinvented the customer experience. Countries around the globe have enforced lockdowns recently and have advised their citizens to socially distance during the COVID-19 pandemic leading to traditional physical banking services declining due to health and safety concerns. This has expedited innovation in financial banking industries.
FTFT has already recruited professionals from this industry, and has been in frequent contact with companies in this sector in Southeast Asia and Europe, in order to find M&A targets.
The countries of the Association of Southeast Asian Nations (“ASEAN”) are the main target markets of FTFT, as half of the more than 300 million Internet users in ASEAN countries have not yet used online financial services. The annual digital payment in ASEAN is around RMB 5 trillion (approximately $714 billion)(Source:The Future of Southeast Asia’s Digital Financial Services Industry), which is much smaller compared to nearly RMB300 trillion in mainland China (approximately $42.85 trillion)(Source:2019 China Mobile Payment Development Report). Economic and trade cooperation between China and ASEAN countries has accelerated recently with increasing trade volumes and progress being made in regional economic integration. The market for cross-border payments and other financial services have huge potential. FTFT plans to open up cross-border payment channels between China and ASEAN countries through merger and acquisition with companies that have existing challenger banking and digital payment technologies and through cooperation with China’s WeChat and Alipay.
Mr. Shanchun Huang , CEO of FTFT, said, “ASEAN is a huge potential market for challenger banks. Under the leadership of our board of directors and management, we will build our competitive technology and business advantage in challenger banking and digital payment sector through our M&A strategy. Our goal is to turn FTFT into one of the leading financial technology companies in Asia, not only bringing a better banking experience to customers, but also bringing significant returns to our shareholders.”