Go Left, Go Right? Bank-affiliated Fintech Companies Reposition Themselves

◎ Reporter Xu Xiaoxiao

After years of the “technology empowering finance” wave sweeping the industry, bank-affiliated fintech subsidiaries are standing at a strategic crossroads: should they continue to expand outward and develop market-oriented profit models, or focus inward and serve their parent banks’ digital transformation?

Recently, institutions such as Bank of China Hong Kong and Huaxia Bank have adjusted the positioning of their technology subsidiaries. Under the pressure of external market expansion being hindered and internal collaboration efficiency needing improvement, these bank-affiliated fintech companies are either consolidating resources or rebranding to focus more on “practical results,” emphasizing serving their parent banks. Among them, the most notable is Bank of China Hong Kong’s deep integration of its mainland technology resources.

To improve operational efficiency and strengthen its presence in the Guangdong-Hong Kong-Macau Greater Bay Area, Bank of China Hong Kong is merging its “Bank of China Information Technology Services (Shenzhen) Co., Ltd.” (referred to as “BOC Information”) established in 1993 with “BOC Digital Services (Nanning) Co., Ltd.” and establishing a new “BOC Hong Kong Shenzhen Information Technology Center” in Shenzhen. The center inherits the core team of the original BOC Information and is led by Wu Shaozhong, Deputy General Manager of BOC Hong Kong’s IT Department.

Shanghai Securities News has learned that currently, several banks in Shenzhen have established technology subsidiaries, including CITIC Bank (International), TMB Bank, and Oversea-Chinese Banking Corporation (OCBC).

Nationwide, according to incomplete statistics by the reporter, there are at least 28 bank-affiliated fintech subsidiaries, covering state-owned large banks, joint-stock banks, city commercial banks, rural commercial banks, and private banks.

In earlier years, bank-affiliated technology subsidiaries were highly anticipated—they were expected to isolate business and technology, and transform high-cost tech departments into profit centers. However, after years of development, most have chosen to revert to their parent bank systems. For example, in March this year, Huaxia Bank renamed its wholly-owned subsidiary “Longying Zhida” to “Huayin Digital Technology (Beijing) Co., Ltd.” to further strengthen its role in supporting the parent bank’s digital technology.

A technical staff member from a distributed trading system of a fintech company told Shanghai Securities News that the products of bank technology subsidiaries originate from specific architectures and processes of their parent banks, making them highly customized with low standardization, which makes low-cost replication and promotion difficult. Meanwhile, strict compliance requirements, high data barriers, and rigid incentive mechanisms result in a lack of cost advantages in market response, operations, and commercial iteration. The high R&D investment at the foundational level is difficult to convert into large-scale profits in the short term.

Dong Yaohui, Vice President of the Shenzhen Financial Stability Development Research Institute, told Shanghai Securities News that the core positioning of bank technology subsidiaries is rapidly shifting from “independent profit centers” to “cost centers and capability engines supporting the parent bank’s digital transformation.” This is a rational and necessary strategic reshaping for financial institutions to adapt to current economic and financial conditions.

However, industry insiders remain optimistic about the future of bank technology subsidiaries. Dong Yaohui said that as the importance of “digital finance” rises, technology is spreading from leading institutions to small and medium-sized ones on a large scale, entering a period of dividend release from initial investments. After strategic integration, bank tech subsidiaries, while strictly adhering to data security and compliance, will become core engines driving high-quality financial development and serving the real economy, with broad future potential.

While most institutions are choosing to shrink their scope, some are still exploring outward expansion. For example, WeBank Technology established in Hong Kong in January 2025 has quickly expanded into markets such as Indonesia, Malaysia, and Thailand, negotiating cooperation with over 20 organizations.

Wang Pengbo predicts: “On one hand, most institutions will focus on internal IT services and gradually reduce outward output; on the other hand, a few entities with technological or cross-border advantages will explore differentiated overseas paths. AI applications and data security will become key capabilities, and the industry as a whole will shift from scale expansion to a development model prioritizing quality and compliance.”