FinTech Industry Must Have Regulations, Xiaomi’s Head Says

FinTech Industry Must Have Regulations, Xiaomi’s Head Says

Shea Chen, Xiaomi’s Head of Consumer Lending, has expressed that more than the last few years, a number of issues with China’s fintech industry has to

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Shea Chen, Xiaomi’s Head of Consumer Lending, has expressed that more than the last few years, a number of issues with China’s fintech industry has to have regulations.

Chen has said on Bloomberg Daybreak: Asia that the industry has to have regulations to employ the behaviors and activities and to mould it in a good manner.

Chen has stated that for new goals to be formed, there should be more space. This is significant in order to create before the new regulations are set into place.

Nonetheless, Xiaomi’s head has added that if companies are not self-regulated, then the authorities and the Chinese government should put some new regulations in place in order to make sure everything is being managed the way it should be.

The highest risks within the industry, according to Chen, are financing and risk management. While the need for funds has increased, squeezing profits, some companies are not able to pay back their loans.

Alibaba to have a new rival in Xiaomi?

Back in the year 2015, the Wall Street Journal has reported that Xiaomi, the top Chinese smartphone maker, was the latest tech company that has extended into financial services. By taking such a step, Xiaomi has indicated its ambition to become a rival to the Alibaba Group.

However, it has some rigid competition to the fore of it.

Alipay, Ant Financial’s financial application, is run by Alibaba. It is a payment flatform in the country that has become most used. It has over 900 million accounts and it boasts of 350 active and registered users. Alipay has $60 billion market cap value in January, and it looks to take over the country’s fintech industry. It also continues to get traditional banking customers through its substitute banking services.

In spite of coming into the fintech industry after WeChat or Alibaba, Xiaomi’s head trusts that the company has not joined in it too late. Also, expanding into this space merely depends on the timing.

There are more than 200 million smartphone users and more than 60 million IoT devices connected. Thus, this interprets into many customers.

On the other hand, with China’s huge market offer, Chen says that there is enough room to expand even with the industry’s competitors like WeChat and Alibaba leading the way.

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