The fintech giant Ant Group is headed for one of the biggest IPOs of all time. This isn’t just a big deal for Wall Street, it’s also a big deal for main street.
Because credit card adoption is low in Asia, consumers needed a way to handle online payments, and Ant filled that gap. Since then, they’ve expanded dramatically into credit rating, insurance underwriting, lines of credit, savings accounts, investment accounts, insurance policies, etc.
The amount of data they have on their customers has investors salivating.
Adoption of these financial innovations have been a little slower in America. We have stronger banks and other payment systems (like credit cards) that Americans like and feel comfortable using.
But over time, I expect many of the digital products Ant offers to become the norm in the US. Just one example of change is that we are currently seeing that cash usage is way down over precautionary measures for the coronavirus. We’ll see the trend towards digital payments increase into the future.
This is exciting to me today because we’re seeing big innovations that impact the way the world works.
In future, I can imagine that these digital products could even play a role in how Alliance does business. Companies like Ant, which have tremendous visibility into the financial health of their customers, can offer their insights to help Alliance even better assess things such as: tenant credit worthiness, due diligence, and insurance.
While our current operations are working very well, anything that makes us faster and more accurate will add directly to our investors’ returns. We’re always on the lookout for innovative approaches.
As a society we’re just starting to scratch the surface of this new wave of financial innovation. For all the obvious applications, there must be many more that I haven’t even imagined yet. It’s a very exciting time to be in the finance industry, and I’ll continue to monitor this space closely.