Recent years have seen the Chinese fintech sector boom, with an array of startups attracting hundreds of billions of yuan in investments, and China seemingly at the forefront of technological innovation in finance.
Every boom has to slow down eventually, and 2017 has seen consolidation and growing maturity in the sector, with tighter regulations in place as authorities look to keep pace with whirlwind growth.
Technology like blockchain and big data are now being adopted to solve real problems, boost efficiency and lay the foundations for fintech to become much more than just another flash in the pan.
Meanwhile, despite early excitement for areas such as peer-to-peer (P2P) lending and financial robo-advisors, risks to investors and teething problems have forced those behind the fintech sector to readjust and provide solutions that are both useful, safe and innovative to their customers.
Less hype, more maturity
While investments in the Chinese fintech sector tripled to almost 10 billion US dollars in 2016 compared to the year before, 2017 has seen a significant drop in corporate fintech investments across Asia. KPMG reports that corporates have only put 840 million US dollars into the sector in 2017, compared to 6.8 billion US dollars in 2016.
That fall has coincided with IPOs for online lender Qudian and Internet insurer Zhong An, as well as a push into Southeast Asia by Chinese fintech companies, suggesting China's giants in the sector are maturing and the startup boom is slowing down.
KPMG's report also suggested that Chinese fintech is moving from a B2C model to B2B, saying "fintech companies that might have started with a customer focus are now embracing a business-to-business model, providing their solutions to traditional financial institutions".
This comes after greater regulations from authorities, following scandals over Ponzi schemes played out through lending platforms like Ezubao, which saw more than 50 billion yuan (7.2 billion US dollars) worth of investments taken illegally from one million users.
Decline of P2P, robo-advisors
The fallout of the Ezubao scandal has put greater pressure on the wider P2P lending domain, with a series of regulations rolled out in 2017, including caps on investments and platforms being required to keep money in third-party investor funds.
There were more than 2,400 different P2P platforms at the start of the year, and while the new rules put pressure on smaller players in China's online lending market, bigger names like Qudian, Lufax and Dianrong.com now claim to play by the rules.
One other area that has struggled in 2017 has been robo-advisors. In 2016, China Merchants Securities predicted that by 2020, some 5.22 trillion yuan (758 billion US dollars) worth of assets would be managed by robot financiers.
However, this year Nomura has said that there is a big gap between what robo-advisors claim they can do, and what they can actually deliver. This has been reflected by skepticism and slow take up in the finance industry.
