Tencent’s WeBank: Can a Bank Connect Everything Without Branch or Internet Banking?

by Hua Zhang, April 16, 2015
Product Trends/ Reviews
Asia-Pacific

Abstract

WeBank does not have any branches or even an Internet banking channel. Its registered capital is only US$500 million, which is very small compared to other commercial banks. How will WeBank shake the banking industry? WeBank’s success may lie in its scenario-based financial services.

In China, the retail banking environment changed dramatically during the last decade. For example, e-commerce and online-to-offline (O2O) services are very popular. Consumers can enjoy delicacies, massages, and manicures at home. Banking channels aspire not to be digital but to become social channels, which will be closer to retail clients.

Facing the environment change, WeBank’s business model has two parts: scenario-based services and big data. In the scenario-based channel model, the banking services are embedded in other services, including entertainment, online education, healthcare, and travel. WeBank has neither online banking nor branches.

TDBANK, WeBank’s big data system, has 40 trillion records about retail customers. The data include online activities, virtual assets, payment behavior, purchase activities, social network information, public credit information, chat content, friends, etc. Use of this data allows WeBank to provide new banking services, such as a virtual mortgage.

Tencent’s WeBank: Can a Bank Connect Everything without Branch or Internet Banking? provides an overview of WeBank, including discussion of retail banking trends and WeBank’s business model. The report also examines WeBank’s big data technology, ecosystem, and advantages.

“WeBank is one part of Tencent’s overall strategy to connect everything,” says Hua Zhang, an analyst with Celent’s Asian Financial Services group and author of the report. “The background of this strategy is the transformation of the Chinese Internet environment.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

The Changing Retail Customer

2

Banking Challengers and Their Innovative Ecosystem

3

 

The Ecosystem of Baidu, Alibaba, and Tencent

4

WeBank: Connect Everything

5

 

Core Is Big Data

5

 

No Internet Banking, But Banking Everywhere

6

 

Advantages of WeBank

8

Conclusion

9

Leveraging Celent’s Expertise

10

 

Support for Financial Institutions

10

 

Support for Vendors

10

Related Celent Research

11

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