Ant and Tencent halt bank deposit shopping as Beijing cracks down

Ant Group's Hangzhou Headquarters. Source: Ant Group

China’s leading fintech companies such as Alibaba Group Holding affiliate Ant Group have removed smartphone app features that allow users to shop around for bank deposits that offer high rates, as concerns mount over their impact on the country’s financial industry.

Tech giants Tencent Holding and Baidu have also halted the service as of Monday.

Platforms like Ant’s Alipay and Tencent’s WeChat Pay used to provide side-by-side comparisons of deposit products at different banks. But financial authorities have instructed them to take deposit-related services down, concerned that increased money flows into and out of smaller banks could destabilize the financial sector.

It is the latest in moves by the central government, irked by the increasing power and influence of tech companies, to increase scrutiny over their operations.

In November, the Shanghai Stock Exchange abruptly suspended Ant’s initial public offering, which was on track to be the largest ever. Earlier this month, Chinese authorities fined Alibaba and a subsidiary of Tencent for allegedly failing to declare past acquisition deals under antitrust laws.

Small and midsize regional institutions in China struggle to compete with big, state-owned banks with stronger reputations. To compete, they offered deposits with higher yields on apps like Alipay, where customers often made their selections based almost entirely on rates.

One bank had been offering an interest rate of 2.17% for one-year time deposits and almost 5% for five-year deposits. Another had received more than 20 billion yuan ($3.05 billion) in online deposits since April, when it first began offering the option.

Competition on these apps could drive interest rate expenses up and result in greater liquidity risks for smaller banks, Sun Tianqi, head of the financial stability bureau at the People’s Bank of China, wrote for a local news outlet.

It is widely believed to be part of President Xi Jinping’s campaign to curb the country’s growing tech giants. At a key economic planning meeting last week, Chinese leaders agreed that they will bolster “anti-monopoly supervision” and “prevent disorderly capital expansion” next year.

This article was first published in Nikkei Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.