Last week, Xiaomi and Bank of Beijing announced entering into a cooperation agreement over mobile payments, financial products development and online financial services.
With this, Xiaomi and Bank of Beijing are the latest to jump onto the bandwagon of China’s burgeoning internet financial services industry. Bank of Beijing Chairman Yan Bingzhu said at the signing ceremony that his bank and XiaoMi will seek to bring together traditional financial products and internet technology, to establish an internet financial services platform for Xiaomi users.
The partnership will utilize Xiaomi’s NFC (Near Field Communications) mobile payment and settlement system through which Xiaomi users will be able to use their phones to pay bills and subscribe for funds, insurance and other financial products to be developed with Bank of Beijing.
Xiaomi is China’s successful smartphone market whose handsets rival other android phones and Apple in the Chinese domestic market. It launched a smart-TV last year, and in another latest development of a global expansion plan, the company is expanding into Singapore where its Redmi phones would be available from early March.
Xiaomi’s move into financial services follows the footsteps of China internet giants Alibaba, Baidu and Tencent, who in recent months pushed out online wealth management products that have put pressure on traditional bank distribution channels. Alibaba’s YueE-bao product is said to have raised around 400 billion yuan (USD65.8 billion) to-date, according to latest reports.
Following the internet giants’ foray, financial institutions such as Industrial and Commercial Bank of China, Bank of Communications and China Guangfa Bank have also launched their own online financial services platform. Bank of Beijing’s partnership with Xiaomi represents the bank’s own bid to keep up with its competition.
The China Securities Regulatory Commission last week said at a press conference that it is working with the China banking regulator to review and study potential regulatory framework and guidelines for the online financial services market.