More and more domestic companies are establishing partnerships with China’s fintech companies. This is largely due to the competition to secure the position as main creditor banks for domestic conglomerates.
According to banking industry sources on Nov. 26, Woori Bank and KEB Hana Bank entered into partnership with Tencent and Alibaba, respectively, expanding financial services for Chinese tourists. Through the cooperation with global fintech companies, the banks are aiming to develop their new growth engines, create new profits and expand to global markets. However, there is another reason behind it which is to competitively secure the position as main creditor banks for large domestic business groups.
An official from a commercial bank said, “Banks are fiercely competing to attract Doosan and Shinsegae, which recently won the right to open new duty free shops, and Lotte and CJ, which have long led the domestic distribution industry, as their customers.
In fact, KEB Hana Bank has succeeded in signing contracts with Lotte Department Store and Lotte Duty Free to provide Alipay payment service after forming a partnership with China’s Alibaba and providing related financial services. Shinhan Bank had been a main creditor for Lotte Group. However, Lotte Department Store, which seeks to meet the rapidly growing demand of Chinese tourists, has decided to join hands with KEB Hana Bank, instead of Shinhan Bank, which does not offer related services.
Woori Bank also established a strategic alliance with Tencent in order to directly provide the WeChat payment service to Chinese tourists and capture domestic conglomerates as its customer. Currently, the bank is under the main creditor bank contracts with 13 out of the nation’s top 20 business groups. It includes Samsung, LG, POSCO and Doosan.
In addition, content companies, which offer various hallyu contents, are also asking the bank to expand Chinese payment services. CJ Group is one of them.