As Chinese tech companies continue to grow, they are expanding into the banking industry. These companies are developing privately owned banks that are 100 percent online. While online banks are not unheard of outside of China, they are new to the Chinese. This expansion into online banking is another way the companies are working to be involved with all the different levels of the consumer process. 

Why online banks?
Technology-focused companies are getting into the banking industry to create new ways of funding new businesses and providing loans. Proponents of the banks are hoping that these new banks will help new companies get off the ground and boost China's already booming economy. The reason many of these companies are focusing on all-online banks is because they are much cheaper to run. Brick-and-mortar banks have more employees and much higher overhead costs. Many of the new banks don't backup or control information with internal computer systems. All of their information is backed up to the cloud which is cheaper than internal computer and network infrastructure. It is efforts like these that will keep the cost of running the bank low and allow for more lending options and fewer employees. 

Who's creating them?
The most recent company to get into the online banking arena is ecommerce giant, Alibaba. The Alibaba-backed Mybank debuted on June 25, and its president, Eric Jing, said it will be focused on giving loans to smaller enterprises and startups. Currently, the bank employs 300 people and is a part of Ant Financial. Another company that's backing an online bank is Tencent Holdings Ltd. It opened WeBank earlier this year. Tencent is an investment holding company known for its investments in social networks, online gaming and much more. WeBank and Mybank aren't the only new developments. According to Fortune, WeBank was one of "six new projects approved by Chinese banking regulators."

Will they be successful?
According to a report by McKinsey & Company, a global management consulting firm, China's biggest banks, commonly called the "Big Four," don't have the market share that they used to. The report also states that many Chinese consumers are not opposed to online banks, and that more than 70 percent would consider opening an account with one. While the people are interested, the Alibaba-backed Mybank can open accounts because of concerns from the Chinese banking regulators about some of the software the company is using. It is expected to be some time before the fully online banks pose a real threat to the existing banking companies in China. 

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