China’s Internet Banking Revolution

The Internet in China has started to force real change on once-staid banks, forcing well-fed bankers to cough up better deals on yields on cash deposits that conventionally have been a given under the existing suppressed deposit rate regime. Even though commercial banks have started instituting countermeasures by offering money market funds as well as e-banking platforms, they remain on the defensive and the battle is about to extend into the field of term deposits when Alibaba’s Alipay launches a 12-month, 7 percent anticipated-yield investment product Friday that also protects principal.

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