China’s biggest fintech companies have removed savings products linked to regional banks from their online platforms, amid heightened scrutiny from regulators concerned that the funds are being raised by unstable smaller lenders and could fuel financial risks, reported Caixin.
The financial services arms of tech giants Tencent, JD.com, Baidu, Didi Chuxing, Meituan, Xiaomi, and Lufax Holding, which is backed by financial conglomerate Ping An Insurance, have stopped offering products that allow consumers who use their online platforms to make deposits with brick-and-mortar lenders, said Caixin.
The news follows confirmation Friday by Ant Group, the country’s dominant online fintech platform, that it had halted the service on its Alipay mobile payment app in accordance with regulatory requirements. Some of the companies have said the move will not affect users who have already deposited funds via the products.
China’s regulators have stepped up scrutiny of fintech companies this year, especially since Ant Group’s aborted IPO in early November, as the government continues with its campaign to contain risks in the financial sector. The sector is now facing a crackdown as the potential risks from some online financial companies and products have become too big to ignore.