Abstract

This case demonstrates how Shenzhen-based WeBank Co., Ltd. (WeBank) accelerated financial inclusion in China by providing cost-effective, accessible, suitable, and sustainable financial services to micro, small, and medium-sized enterprises (MSMEs) as well as unbanked and under-banked individuals in China. Founded in 2014, WeBank leveraged leading-edge technologies including artificial intelligence (AI), blockchain, cloud computing, and big data to develop a matrix of distinctive and differentiated digital financial products and services, which enabled MSMEs as well as those members of the general public whose financial requirements were not met by conventional and state-owned banks to enjoy equal access to financial services. WeBank’s technology-driven approach enabled it to significantly lower its IT costs, contributing to a shorter breakeven period and more sustainable growth. As of 2022, it had over 360 million individual customers, making it the digital-only bank with the most extensive customer base in the world. This case explores WeBank’s tech-based open banking model, sources of competitive advantage, challenges, and strategies for promoting financial inclusion in China in the future. As WeBank continued to drive financial inclusion in China and grow, the challenges David Ku, Chairman and CEO of WeBank, and his team could encounter include attracting and retaining customers, building customer trust, reaching greater scale and profitability, strengthening core technology, adhering to strict government regulations, beating the competition in the fintech space, and enabling the financial inclusion of low-income segments of society.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the importance of financial inclusion and its impact on the economic growth of a country.
• Analyze the role of neobanks in accelerating financial inclusion.
• Evaluate the “3O” Paradigm of open banking services adopted by WeBank and the reasons behind its success.
• Identify the challenges facing WeBank in its efforts to drive financial inclusion in China.
• Develop strategies that WeBank can use to reposition itself against competitors and maintain its dominant position in the Chinese digital banking space.

Keywords

Financial inclusion; Neobank; Fintech; WeBank; Digital technology; Open banking; Digital bank; Competitive advantage; Business model; ABCD technologies; Big data; Artificial intelligence; Inclusive finance