On Thursday, Alibaba launched an all-digital bank, MYbank, which services the financial needs of China’s rural areas. MYbank has no physical branches but uses cloud computing, providing 24/7 access for users. It also uses facial-recognition technology to verify account holders’ identities. With lower operating costs, the digital bank may pass on savings to customers. Still, people cannot open accounts as MYbank faces off against strict regulation.
MYbank could open up the tightly regulated banking sector in China. It has a registered capital of 4bn yuan and is capable of issuing loans of under 5mn yuan. MYbank could also encourage development in the rural areas of China, providing loans and capital inflows to the region. Digital banking has a promising future in China, tapping regions that were previously underserved by traditional banks.