Recently state-owned major banks partnered Internet giants in succession, closely cooperating in "financial technology". ICBC, ABC, BOC and CCB have executed cooperation agreements respectively with JD.com, Baidu.com, Tencent.com and Alibaba.com, changing themselves from competitors into partners.

Currently a number of banks are active in combining finance with technology. Self-reliant research and development and technological outsourcing jointly promote continuous technological improvements, marking start of technological competition in banking industry.

There is no everlasting opponent but permanent benefit in commercial competition. Having experienced quick expansion, chaos in operation and tightened supervision, more and more Internet-relevant organizations involving finance sectors are seeking for transformation, and starting to set foot on a path to output financial technology capacity.

Executives of AntFinance expressed clearly that, they focused on financial technology to improve banking efficiency and reduce costs.

While Internet-related financial institutions are proposing return to business and technological output which they are good at, banks are striding toward the world of Internet, which brings a cooperative opportunity to them.

ICBC and JD.com proposed to make close cooperation in financial technology, and ABC and Baidu.com, and BOC and Tencent.com proposed to set up joint lab of financial technology, starting a battle of technological competition in collaboration between strong enterprises.

In the partnership of major banks and Internet giants, cooperation focuses mostly on credit card, consumer finance and risk control in big data.

According to industrial insiders, consumer finance is currently growing and so many banks give high priority to it during transformation into retail business. Internet-related financial institutions such as AntFiance and JD-Finance have been operated for years in the field of consumer finance and developed some Internet-related risk control technologies, which attracts attention of major banks.

A large number of town-level banks in China are weak in IT construction and Internet service, and actively seeking for data collaboration or technical outsourcing with Internet organizations. Consequently, Alibaba.com launched AliCloud in November of 2013 to assist small-sized banks in realizing online payment and constructing e-banking with lower costs. Soon after that, TencentCloud was started to share with AliCloud banking, securities and insurance markets occupied by financial institutions.

However, the essential precondition for cooperation between banks and Internet organizations is security. The major risk in technological collaboration and outsourcing between banks and Internet organizations is information disclosure, as had ever occurred.

Therefore, it was stated by CBRC in related guidelines issued in 2014 that, proportion of safe and controllable information technologies applied by banking industry in 2019 shall be 75%, and monitoring on financial technology is also put on the agenda.

Since it is hard to realize propulsion and refining of the goal only by purchasing technological outsourcing services, banks have to strengthen construction of their own technology capacity.

As a result, major state-owned banks set up their technology divisions to perform research and development. ICBC has 13,000 technical staff around China while CCB has more than 7,000.

"Once an Internet giant said: 'if banks won't change, we will change them.' Now the banks are changing by updating and upgrading their IT systems," expressed Jin Panshi, the general manager of IT Management Department of CCB, and mentioned that a "new-generation core system" developed for six years was started successfully a few days before, which not only was updated technologically, but also had management and service models of banking re-integrated.

It is said by industrial insiders that, risk control in big data or product or process innovation requires centralized collection of data scattered at branch banks and business departments, and for this purpose both a powerful and advanced technological core system and specialized technical staff are needed.

"Technical departments in banks are being transformed toward R&D center, and technical R&D staff also have to make survey and study in financial business. Technological upgrade in banks is not simply purchase of technologies, nor containing old wine in a new bottle," said Mr. Jin Panshi.