"Digital Technology Leads the Future" takes stock of the highlights of fintech development in 2023

In 2023, emerging technologies are flourishing, leading and assisting many financial institutions in accelerating their digital transformation. At the same time, generative AI technology represented by ChatGPT has begun to rise, and major enterprises have successively launched new research and development achievements, igniting the market one after another.

NO.1 Generative AI Rises a Tide

In 2023, with the rapid application of ChatGPT globally, China has also launched a wave of AI innovation. Financial institutions, as pioneers in the application of new technologies, have also strengthened the layout of generative AI.

For example, the Agricultural Bank of China's big language model service ChatABC has been successfully put into operation and piloted for internal testing, and is open for trial to employees of the head office through multiple channels such as web and Tianshu. China Merchants Bank has released a promotional article on its official WeChat account, with ChatGPT's participation, about its family credit card. Jiangsu Bank applies ChatGPT and Codex technology to analyze the operation of internal information systems. Beijing Bank has constructed a "B=IB+AIB" iron triangle matrix strategy, covering retail and technology driven banks (B), investment banks (IB), and AI driven banks (AIB). This strategy not only reshapes the traditional commercial banking model, shifting it from passive services to actively providing value, but also accelerates the construction of enterprise level digitalization and AI driven financial core capabilities.

NO.2 Accelerated landing of digital RMB

Digital RMB is a digital legal tender issued by the People's Bank of China, operated by designated operating institutions and exchanged with the public. It is based on the broad account system and is exchanged 1:1 with the physical RMB, jointly forming the legal currency system. In 2023, the digital renminbi will bloom in multiple fields and achieve new breakthroughs.

In Qingdao, the application of digital RMB without network or electricity payment has been piloted in the field of rail transit; In Guangzhou, the application of digital RMB loans for housing provident fund has been implemented, achieving full coverage of digital RMB applications in major business scenarios such as housing provident fund deposits, withdrawals, and loans; In Suzhou, the application of digital RMB without internet or electricity payment has been implemented in the field of public transportation.

From the perspective of the banking industry, Postal Savings Bank of China has showcased its digital RMB prepaid product "Zhianxin", which is an innovative attempt by the bank in the application of digital RMB smart contracts. Postal Savings Bank of China Dalian Branch has launched a "Small and Micro e-Loan" digital RMB payment channel. Small enterprise customers only need to open a digital RMB corporate wallet to achieve a full online transaction loop for loan application, approval, disbursement, and payment. Jiangsu Bank further assists technology-based small and medium-sized enterprises in improving payment and settlement efficiency through the digital RMB "Suke Loan".

At the same time, the insurance industry is also accelerating the layout of digital RMB, and its application scenarios have expanded to areas such as premium payment and claims settlement. The first offline shopping no reason return loss insurance project in Jiangsu Province, "Wu You Digital Insurance", has officially landed. The agreement stipulates that both parties will pay insurance fees and claims in digital RMB; The first batch of "digital RMB insurance policies" in the Hengqin Guangdong Macao Deep Cooperation Zone have also been implemented this year. Users can purchase insurance products such as Hengqin Life Insurance accidental injury through the digital RMB wallet.

NO.3 Rapid development of embedded finance

2023 is a year of rapid development in technological innovation. From various sources of information, embedded finance, representing one of the greatest innovation opportunities in the entire fintech industry, has achieved good development. The so-called embedded finance refers to integrating financial services into non-financial websites, mobile applications, and business processes. From instant payment, cross-border transactions, to investment, credit, insurance, and more, any company can use embedded finance to create additional value for customers.

From a foreign perspective, the Monetary Authority of Singapore and the Bank of India have launched a cross-border instant payment system connection - PayNow UPI, which connects Singapore's cashless payment platform PayNow with India's unified payment interface UPI. This is India's first and Singapore's second cross-border instant payment system connection, as well as the world's first cloud computing based infrastructure. The UAE Central Bank has also launched a financial infrastructure transformation plan, including instant payment platforms.

From a domestic perspective, the development of embedded insurance is particularly rapid. For example, during the cooperation with the travel agency, Grant Thornton Technology learned that every year the terminal customers have a large demand for international travel accident insurance, but they need to search and purchase the core pain points of insurance separately in specific scenarios, so as to build and embed the travel insurance solution in the travel agency's digital channel matrix, including website, app, Tiktok, WeChat applet and other social media accounts embedded in all channels. Under this empowerment, Zhibao Technology has brought over 100000 customers to its partners and tailored insurance brokerage services specifically for these customers.

NO.4 Multimodal Biometric Recognition Becomes Popular

Multimodal biometric recognition refers to the fusion and application of two or more biometric data to more accurately confirm an individual's identity. Due to the involvement of large capital transactions in the financial industry, there is a strong demand for multimodal biometric identification. In 2023, not only have fintech companies developed and launched various multimodal biometric products, but banking and financial institutions have also actively explored the field of multimodal biometric.

As a pioneer in multimodal biometric recognition, Entropy Technology has launched the multimodal biometric access control product T02M, which supports fingerprint recognition and visible light dynamic facial recognition. At the same time, it also launched the edge computing scheme "BioCV Hyperbrain" based on multimodal hybrid biometrics technology, which makes the authentication and recognition process more accurate and safe while satisfying the application of different scenarios. Ping An Bank has released a patent titled "Transfer Method, Device, and System Based on Facial and Voice Dual Recognition". This patent provides a transfer method based on dual recognition of face and voice. Bank of China uses multimodal biometric authentication for identity authentication, improving the user experience and reducing the risk of large transactions.

NO.5 Quantum Computing Precision Drip Irrigation Finance Industry

Quantum computing, as a disruptive technology, helps to break through computing power constraints, simulate random behavior, and protect information security. It is suitable for financial scenarios with high repetitive computing, high algorithm complexity, and certain fault tolerance. It has potential applications in asset management, product design, and other areas. In 2023, banking and financial institutions have strengthened the research and application of quantum technology and achieved certain results.

At the 2023 IDC China Digital Finance Forum, Ping An Bank's quantum computing project won the 2023 IDC China Financial Industry Technology Application Scenario Innovation Award. The award-winning project of Ping An Bank this time is the exploration and application of quantum computing in the fields of anti fraud and anti money laundering. This is the first time that domestic financial institutions have used quantum computing power in algorithm research for anti fraud and anti money laundering. Huaxia Bank actively embraces quantum technology and innovatively proposes the methodology of quantum financial technology, laying a theoretical foundation for the mass introduction of quantum technology into the financial field. It has also conducted a series of explorations in key fields such as quantum computing and quantum communication, in order to provide reference for the transformation of quantum technology into practicality and engineering in the financial field.

Cloud service providers such as IBM Quantum and Google Quantum Artificial Intelligence are actively promoting the application of quantum computing in the financial field. They have lowered the technical barriers and upfront costs of building quantum computers by providing cloud quantum computing resources to fintech clients.

NO.6 Blockchain Technology Innovation

The third major technological innovation in the history of blockchain development - the application of zero knowledge proof - will become popular in 2023. Zero knowledge proof is an encryption protocol that allows one party (the verifier) to prove to the other party (the verifier) whether a statement is correct without revealing any additional information beyond whether the statement itself is true. Zero knowledge proof has great application value in privacy sensitive scenarios, such as online transactions, identity verification, and other scenarios that require the protection of sensitive information. The combination of blockchain and zero knowledge proof allows users to use private data to execute smart contracts without disclosing specific data content.

ZkSync Era is a blockchain extension solution built on Ethereum, which enables faster and low-cost transactions with the help of zero knowledge proof. Statistics show that its asset withdrawal to Ethereum takes up to 3 hours and as little as 15 minutes, while also being able to expand the Ethereum blockchain in a lower cost and more efficient way, while maintaining the same level of security.

NO.7 "Cloud Services" Entering a Better Era

Currently, with the rapid development of the digital economy, "cloud services" have become an important way for banks to provide digital financial services. While building a cloud service system, various banks are extensively exploring digital finance solutions in different industries and fields, continuously enhancing the quality and efficiency of financial services through technology empowerment. By using cloud services, banks can leverage advanced security measures and compliance tools to better protect customer data and comply with regulatory requirements.

Cloud services enable banks to quickly deploy new applications, easily test new business models and services, thereby accelerating the pace of product and service innovation. For example, Everbright Bank has innovatively launched the Enterprise Administrative Management Service Cloud Platform - "Salary Yue Tong", which has built a one-stop digital management ecosystem including personnel, attendance, salary, personal income tax management, and office services, helping enterprises invest limited manpower into enterprise value creation, helping enterprises improve production and operation efficiency, and enhance core competitiveness. "Salary Yue Tong" meets the customized management permissions required for human resource management in different types of enterprises, effectively enhancing the diversification and refinement of enterprise management.