WeBank emerged as a leading player in the region in terms of scale, profitability and execution of market leading propositions. Since its launch in 2014 as the first digital-only bank in China, WeBank has expanded its customer base to more than 200 million individual customers and 0.9 million small and micro businesses. The bank is estimated to add over three million users per month, while other players in the region are averaging around a hundred thousand. Profitability has been difficult to achieve for digital banks, given that players typically focus on expansion rather than profit by operating a no-fee model to compete with incumbent banks and build a customer base. On average, newly-established digital banks such as WeBank, MYbank and kakaobank turned their business from loss to profit-making in just two years. Meanwhile, first generation internet banks such as Jibun Bank and Rakuten Bank took more than four years to turn profitable.
WeBank posted the highest net profit in 2019, followed by Australia’s ING Bank and Japan’s Seven Bank. WeBank outperformed other digital banks by increasing its net profit by 60% to $565 million and achieving a return on equity (ROE) of 28.2% in 2019. The ROEs of digital banks XWBank and aiBank in China, Jibun Bank in Japan and kakaobank in South Korea were below 3%. Looking at net profit per user, however, ING Bank with 2.6 million customers generates around $117 per user while WeBank only makes $2.8 per user. WeBank connects a range of internet companies and financial institutions to jointly create an inclusive finance ecosystem enabled by digital and fintech capabilities. In 2017, the bank introduced a ‘collaborative business model’, a type of production relationship formed between multiple parties on the basis of mutual economic benefits and status among participants. In 2019, the bank continued to strengthen its FISCO BCOS programme, an open source platform leveraging blockchain technology that brings together thousands of community members and is one of the largest and most active locally developed open source ecosystems on a consortium blockchain. Currently, thousands of developers have joined the community while hundreds of organizations have adopted FISCO BCOS and designed various use cases.