Future FinTech (FTFT) plans to enter the challenger bank and digital payment sector

By Edil Corneille

Future FinTech Group (FTFT), a blockchain e-commerce and financial technology company, announced its plans of entering the challenger bank and digital payment sector. The FinTech has recruited professionals from the industry and has been in frequent contact with companies in Southeast Asia and Europe, in order to find M&A targets. Challenger banks compete with traditional institutions by specialising in underserved areas.

Shanchun Huang, CEO, FTFT elucidated, “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.”

Also called neobanks, the challenger banks distinguish themselves from the historic ones by modern financial technology practices. These are 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 personalised 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.

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. 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 has huge potential. The company plans to open up cross-border payment channels between China and ASEAN countries through mergers and acquisitions with companies that have existing challenger banking and digital payment technologies and through cooperation with China’s WeChat and Alipay.