Financial Institutions

The Rise of Digital Finance in China: New Drivers, New Game, and New Strategy

Over the past two years, digital finance has become the market's new focal point. The industry will experience an influx of a variety of new entrants, not only conventional financial institutions but also Internet companies; digital-finance operators, such as peer-to-peer networks, crowdfunding sites, and financial vertical search engines; telecom operators; and infrastructure vendors. Classic strategies employed by traditional financial-industry incumbents may lose their effectiveness as industry dynamics and key success factors change. Rather than take a conventional approach to strategic planning and depend on the historical advantages of scale, pricing, and channel, companies need to capitalize on a variety of alternative advantages. As BCG's first report on digital finance in China, the report reveals the driving force behind the fast-growing digital finance market in China, deep dives into four emerging key success factors in digital finance and their implications for different market players. It also proposes BCG’s proprietary Adaptive Strategy model and outlines its five advantages for players to respond to and succeed in this dynamic market, and, quantifies the social and economic value created by digital finance.

Digital, Technology, and Data