Financial technology has reached a tipping point for China’s Ping An Technology and future growth in that area is set to be exponential, according to CEO Ericson Chan.
Years of investment and research into fintech is paying off, Chan told CNBC’s “Squawk Box” on Thursday.
“I think we are just hitting a tipping point because of all the investments … and the pie is getting bigger also — the growth is not linear, it’s going to be exponential,” he said. “A lot of the capability that we’ve built over the years is exciting right now.”
Ping An Technology is a wholly owned subsidiary of Ping An Group, a major finance conglomerate in China that does business in insurance, banking, investment and technology. Ping An Technology’s focus is on applying various technologies in areas such as finance, health care and smart cities.
In the first nine months of 2018, the fintech and health tech businesses contributed to about 6.3 percent of Ping An Group’s operating profit, up from only 0.9 percent a year ago. Ping An does not break down the numbers individually for financial tech and health tech but it comprises results from subsidiaries including Lufax Holding, Ping An Good Doctor, OneConnect, Ping An Healthcare Technology and Autohome.
Both fintech and health care are equally important to Ping An, according to Chan.
On Wednesday, Ping An Group said it expects to invest about $15 billion in technology research and development over the next decade to try and consolidate its leadership in the financial services industry.
“We focus on five different ecosystems, but when we invest, we first invest in the core technology,” Chan said. Those core technologies include artificial intelligence, blockchain and cloud, which he said will “cut across horizontally on all sectors.”
The five so-called ecosystems where Ping An will invest are finance, health care, automobile, smart city initiatives and housing.
When asked how Ping An plans to tackle competition in the cloud sector from the likes of Alibaba, Chan said his company’s approach to that technology “will be quite different.”
“We develop our own cloud technology out of a necessity,” he said. “Because we have so much technology built, we need to have a strong foundation ourselves. So this is why we build ourselves. When it is good enough for ourselves, we start to share with others.”