Huawei set sights on digital financial services to diversify revenue sources as US sanctions hit smartphone, telecoms equipment business
Chinese telecommunications giant Huawei Technologies is aiming to tap the rapid pace of digitalisation in the global financial services industry after its network gear and smartphone businesses were dragged down by US sanctions.
It recently formed an alliance with 25 partners including software developers, fintech companies and risk managers to create an ecosystem that offers digital financial solutions ranging from technical architecture and operational support to brand promotion.
It joins Ping An Insurance and Ant Group as the third major Chinese players to compete in the booming global market.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
“Intelligent finance itself has a market valued at several hundreds of billions of dollars, but the potential is bigger because there will be cross-sector opportunities,” Jason Cao, president of Huawei’s global financial services business unit, told the South China Morning Post. “Digitalised financial services have already penetrated into various commercial fields, and a cross-industry, full-scenario eco-system can be built by us to serve the clients.”
Huawei’s enterprise business climbed 23 per cent on the previous year to 100.3 billion yuan (US$15.67) in 2020, spurred by demand for information structure upgrades such as cloud and artificial intelligence.
The pace of growth largely beat the group’s overall business performance, which saw revenue rise 3.8 per cent to 891.4 billion yuan last year.
Huawei’s consumer business segment posted a 3.3 per cent year-on-year gain in 2020, a far cry from a 34 per cent jump a year earlier as US sanctions hit its smartphone shipments.
Cao said the financial services unit, part of the enterprise business at Huawei, grew faster than 23 per cent in 2020. He hopes to capitalise on that through the new alliance.
“You do not just offer what financial firms demand in the new era,” Cao said. “The key to staying ahead is developing innovative scenario-based solutions.”
Examples include facial recognition and big data technology, that are increasingly being used by automatic teller machines (ATMs) and credit assessment departments in retail banking.
The company already serves more than 2,000 financial institutions in over 60 countries and regions, including 47 of the world’s top 100 banks.
Southeast Asia, the Middle East, Latin America and Africa, where financial inclusiveness is underdeveloped, offer the biggest growth opportunities for Huawei, Cao said.
OneConnect Financial Technology, a cloud-based fintech platform controlled by Ping An Insurance (Group), is also aggressively expanding in Southeast Asia as the Covid-19 pandemic spurs demand for digital banking services among regulators and institutions for its products and services.
Ant Group ” an affiliate of Alibaba Group Holding, which also owns this newspaper ” is expanding outside the mainland by serving individual consumers with its own financial technologies.
According to a research report by IDC in May, Huawei clinched the top spot in the mainland’s financial cloud infrastructure market, enjoying a 21.3 per cent share worth US$3.27 billion.
This article originally appeared on the South China Morning Post (SCMP), the leading news media reporting on China and Asia. For more SCMP stories, please download our mobile app, follow us on Twitter, and like us on Facebook.
Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.