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

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

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16 April 2015
Hua Zhang

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.”

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