Open banking, API, financial inclusion. The list of buzzwords that condense the multitude of market developments in Asia’s banking industry is ever growing. As technology continues to reshape the whole banking ecosystem, small and medium sized banks are also looking to benefit from the latest technology revolution.

 

“Many retail banks need technological support and assistance as they go through their digital transformation,” says Steven Shi, president of smart risk management at Ping An OneConnect, in an interview with The Asset. “Without having the right technology in place, it is challenging to effectively serve millions of customers in a single Chinese city.”

 

Open banking has been a particular challenge for small and medium-sized banks in China as the lack of relevant expertise and investment put the benefits of open banking out of reach for most smaller banks. Less than 5% of small and medium-sized banks have made data delivery via APIs available to external companies and only 27% of small and medium-sized banks have put an IT front-end in place, according to OneConnect.

 

In June 2019, OneConnect launched Gamma O, an open platform for the financial industry that was designed by Gamma Lab. The platform, similar to an app store for financial institutions, is a one-stop shop that allows banks to connect with service providers and find the right selection of solutions that will enable them to realize their digital ambitions.

 

Currently, SMEs, farmers and retail customers who are not covered by China’s credit system are three key client segments served by OneConnect’s clients.

 

“Each client segment has its own pain points. We are developing risk management measures and solutions for their needs according to their local situation,” says Shi. “Most technology companies do not have adequate levels of experience in finance, which usually means that they cannot support the evolving needs of different financial institutions.”

 

One milestone product that OneConnect successfully delivered on Gamma O in 2019 was facial recognition technology for pigs in Shandong province. Insurance companies and banks using this technology are able to keep track of the movement of pigs and identify each pig in the farm. As such, banks are able to determine the collateral value in credit approval process for farmers, and insurance companies are also comfortable insuring pig herds.

 

In June 2019, OneConnect signed an MOU with Hong Kong Cyberport to offer Cyberport FinTech innovators more powerful tools to use and a bigger stage to play on. As of June 2019, more than 500 tech companies and 300 banks had signed up for or indicated an interest in joining Gamma O under the Hong Kong Cyberport digital community.

 

Established in 2015, OneConnect Gamma Lab has already served over 600 banks and 80 insurers.