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How integrated finance ecosystems are empowering millions in China
A new vision is providing the inter-connected financial tools people need to power their dreams
Since ancient times, when Babylonia developed lending and China’s Qin emperor introduced a uniform copper coin, financial innovation has fostered the growth of societies.
Today we are witnessing a new financial revolution, with digital ecosystems of seamlessly integrated financial solutions spreading to all areas of modern life, helping people to live better and plan brighter futures.
McKinsey reports that “the most significant trend [today] is that customers increasingly seek simple, holistic, embedded and direct [financial services] experiences”. The reason is that new digital platforms — from smartphone apps to robo-advisors — are giving millions access to leading-edge financial expertise that was once the preserve of a tiny elite.
Ping An is a pioneer and a leader in this new digital era, putting a comprehensive range of integrated finance solutions at everyone’s fingertips. Its “one customer, multiple products and one-stop services'' model offers far more than convenience. It enables people to make optimal lifestyle choices by providing a 360-degree picture of their finance needs — from insurance and healthcare to investment and home financing — in an integrated ecosystem.
Dynamic circle of empowerment
Under this new empowerment model, integrated finance solutions save customers time and money. Meanwhile, Ping An benefits from cross-selling opportunities, with the proportion of retail customers holding multiple contracts with different subsidiaries doubling from 19 per cent at the end of 2015 to 38 per cent at the close of 2020.
What’s more, Ping An has found that customers with multiple contracts are the most loyal. The company enjoys diversification advantages, too, balancing out business cycles across group units. If life insurance is suffering a downward phase, for example, other business sectors can pick up the slack.
During the first nine months of 2021, when the group’s life insurance revenues were affected by the business undergoing strategic reform, technology and banking operations registered operating profit growth of 59.3 per cent and 30.1 per cent respectively. This helped the overall group operating profit to rise 10 per cent in the same period.
This new vision is powered by world-class innovation in technologies, including artificial intelligence and blockchain, enabling Ping An to create groundbreaking solutions in everything from asset management to healthcare.
The strategy is garnering attention for the way it fosters growth over time, immune to short-term economic fluctuations and providing value to customers throughout their lives. “As a giant financial group with integrated finance,” Harvard Business Review’s Chinese edition says, “Ping An’s core advantage lies in the ability to balance risks and resilience against growth pressure at tough stages of industry life cycle.”
The new financial ecosystem model in action
Imagine visiting an auto website to look for your dream car, and finding not only a great deal but also financing options and the best insurance solution — all through a single digital interface. This is the kind of experience that Ping An is making a reality with its integrated model.
By anticipating people’s needs, Ping An’s scenario-driven strategy not only reaches more customers than traditional marketing, it also encourages their loyalty. By identifying key scenarios and providing a suitable service for each scenario — through offerings such as healthcare — the strategy empowers the customer and enhances their lifestyle, security and wellbeing.
In the car-buying case above, this might be achieved through Ping An’s platform Autohome. As another example, Ping An’s health-monitoring services can help an insurance customer to embrace a healthy lifestyle, bringing premiums down while also enabling Ping An to increase sales and reduce payouts.
“The old, traditional financial model was to sell products first and then provide services, but now the ecosystem-based model provides a service first and then offers products,” Ping An chairman Peter Ma said at recent press conference. “We believe this will be a global trend in the financial industry in the future."
By overturning the traditional business model, Ping An last year brought in 36 per cent of its more than 37m new customers from internet users already using its ecosystems – creating a valuable new channel of “user-to-customer” journeys.
Today Ping An has 223m customers and nearly 627m internet users of its ecosystems. Ping An estimates at least 400m still have the potential to migrate and become individual customers of the company — representing a massive pool of potential new customers and future growth.
The key is integrated services that are simple and easy to use. “Ping An can provide not only financial services that customers need under different scenarios, but also smart tools used to make payment easier with one account and increase yield,” says Harvard Business Review’s Chinese edition.
Integrated finance for healthy, sustainable lives
The core technologies driving Ping An’s scenario-based vision include biometrics, big data, AI, blockchain and the cloud. The ambitious goal is to place next-generation technologies at the service of everyone, improving wellbeing through healthcare services and promoting a healthy planet through green financing initiatives.
Ping An has already made significant steps towards its goal, pioneering Chinese digital healthcare with the launch of Ping An Good Doctor in 2014. By leveraging AI services across the group, Ping An Good Doctor is now China’s leading telemedicine platform, with more than 400m registered users.
“Heart-warming insurance must be developed with the help of technology,” Ma told delegates at the group’s life insurance summit earlier this year. “With the support of Ping An’s technology-driven healthcare ecosystem, insurers can not only meet customers' insurance and financial requirements but also their long-term daily life-style needs in medical care, health, senior care and daily life.”
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Article 3: How changing demographics pushed China’s biggest insurer to disrupt the life insurance industry
Article 4: Integrated finance meets satellite technology to promote green growth in China