Digital Inclusive Finance: The Emerging Future and Its Technological Drivers

At the 2017 Peking University Digital Finance Forum, Ant Group’s Chief Strategy Officer Chen Long presented the three major trends of digital inclusive finance, emphasizing that it is a future already unfolding and must distinguish genuine digital finance from low‑quality offerings to protect consumers, support the real economy, and improve financial experiences.

He linked the slowdown of China’s GDP growth and rising debt‑to‑GDP ratios to the need for supply‑side reforms in both the broader economy and the financial sector, arguing that technology‑driven finance can address these challenges.

What makes inclusive finance “good”? It must be universal, affordable, and rich in services (payments, wealth management, credit, insurance, etc.) while being commercially sustainable. Historically, achieving all three simultaneously has been difficult.

Why can digital technology transform inclusive finance? Four cost components—user acquisition, risk assessment, operations, and capital—are being reduced by mobile connectivity, big‑data analytics, artificial intelligence, and cloud computing (cloud costs are roughly one‑tenth of traditional IT). These advances lower transaction costs dramatically, as illustrated by Alipay’s sub‑2‑cent per‑transaction cost and the high automation of insurance claims and customer service.

Key trends identified:

Trend 1: The rise of a cash‑less society, exemplified by Hangzhou’s near‑complete mobile payment adoption.

Trend 2: Development of diversified credit systems (e.g., Sesame Credit) that expand financial access.

Trend 3: User‑centric, comprehensive services for individuals and micro‑enterprises, creating a “my finance” experience.

Trend 4: Rural financial supply‑side reform through supply‑chain financing partnerships.

Trend 5: Global expansion of successful digital finance models, such as Ant’s partnership with India’s PayTM.

Additional innovations include “carbon accounts” that monetize green behavior, and collaborations with the United Nations to launch a global green digital finance alliance.

Recommendations for advancing digital inclusive finance:

Distinguish authentic digital inclusive finance from low‑quality internet finance to ensure industry health.

Adopt market‑oriented mechanisms that encourage private‑sector innovation and competition.

Implement inclusive regulation that empowers innovation while protecting consumers, as reflected in EU PSD2 and G20 principles.

Overall, digital inclusive finance, powered by AI, big data, and cloud computing, is reshaping financial services, reducing costs, and fostering sustainable economic development.