Ping An is strategically positioned as the world leading technology-powered retail financial services group, but its name is perhaps not as widely known as some of its smaller competitors. In terms of geography, Ping An serves the Chinese market and parts of southeast Asia, with around 214 million clients and more than 579 million online service users (as of September 30, 2020), being supported by more than 1.5 million staff. So, while the group is regionally focused, its scale is not to be underestimated.
Both its technological focus and its broad range of services are key to the group’s brand and are part of the reason it ranks among the top worldwide global insurance groups by market value and brand value.
Ma Mingzhe, chairman of Ping An Group, has used three phrases to summarize the role of technology in the group’s strategy: empowering financial services with technologies, empowering ecosystems with technologies, and empowering financial services with ecosystems. Today, technology is the most powerful driver of all of these forces. In the sense Mingzhe describes it, ‘ecosystems’ means building a closed-loop of activities and then serving customers in those areas. ‘Ecosystems empowers finance’ is a relatively rare model in global financial competition, and demands the business proactively enters real-life scenarios in a way that transforms financial services from a low-frequency activity into a relatively high-frequency one. Such involvement in customers’ lives pays off though – Ping An says that it has added between 35 and 45 million new clients every year in the past few years, with 35% gained from the ecosystems.
Building an ecosystem-based business model
Building such a model presents most financial organizations with a cultural challenge. Do you have an inclusive culture that can integrate precise financial practices with the agility and inherent uncertainty of technological innovation? Can you embrace different ideas, mentalities and methodologies? And can you tolerate errors? Such decisions are hard for traditional financial services organizations to make.
Ping An has made the conscious decision to think differently, embracing a less formal office attire to emphasize the need to think less like a financial services group and more like a technology company.
It has also created tools to support the change in focus, setting up a share option scheme for employees in its technology subsidiaries to encourage them to invest in the company in every sense.
Fundamentally too, of course, it has also invested more than Rmb10 billion ($1.5 billion) annually in the past five years, and in 2020 estimated that the total market value of its incubated technology companies has risen to more than $70 billion.
More room for growth
Ping An has identified the healthcare ecosystem as one area ripe for technological investment and estimates that it is worth around Rmb6 trillion in 2019 – and an estimated Rmb16 trillion by 2030 – with a strong existing framework between finance and the sector to build upon.
The group has laid a very strong foundation for healthcare business in the past 20 years, and the largest online healthcare platform in China – Ping An Good Doctor – already has around 350 million registered users.
Environmental, social and governance is another area that Ping An has identified for greater attention, having strived to align its reporting to the standards of major international ESG rating agencies. Ping An Group is determined to practice correct processes and showcase actual results but, as so many have recognized, a lack of consistent context, language and standards mean that ESG reporting worldwide is still unsatisfactory.
To remedy that, Ping An is working on an AI-ESG system to collect, analyze and organize ESG implementation results automatically, and then generate reports accordingly. This should provide a ‘big-picture’ view of the group’s efforts in ESG and significantly scale up its ability to collect and make sense of ESG data through consistent reports. Many listed companies, industry associations and investment firms have expressed an interest in the system, and it could be one of the ways that the group begins to spread its name and its expertise beyond its current core market.