Core Viewpoint - The establishment of bank fintech subsidiaries has not led to the expected growth and profitability, with many returning to their parent banks due to operational challenges and market competition [9][15][37]. Group 1: Industry Overview - The fintech subsidiary of SPDB, PuYin JinKe, opened in Shanghai on August 5, 2024, but this does not indicate a revival of bank tech subsidiaries, as the industry has seen a decline in new establishments since 2022 [4][6]. - Over the past decade, more than 20 banks have established fintech subsidiaries, driven by the need for improved cybersecurity and competition from internet financial companies [7][8]. - Despite initial hopes, these subsidiaries have struggled to generate independent revenue and often rely on their parent banks for survival [9][15]. Group 2: Financial Performance - Financial reports indicate that many fintech subsidiaries have failed to achieve profitability. For instance, ZhongYin JinKe reported a net profit of only 0.11 million yuan in the first half of 2024, while Financial One Account has accumulated losses of 7.33 billion yuan from 2017 to 2023 [18][19]. - The business model of these subsidiaries often leads to losses, as seen with XingYe ShuJin, which reported a net loss of 1.67 million yuan in the first half of 2019 [19]. Group 3: Market Dynamics - The fintech market has become increasingly competitive, with major players like Alibaba and Tencent dominating the financial cloud market, leaving bank subsidiaries struggling to gain market share [29]. - Regulatory changes have also impacted the ability of these subsidiaries to operate independently, as new guidelines restrict the outsourcing of core IT functions [26][27]. Group 4: Future Outlook - The trend of fintech subsidiaries returning to their parent banks is expected to continue, as their primary revenue source remains servicing the parent bank, which diminishes their independent operational significance [37][39]. - The lack of competitive advantage and the challenges in providing innovative solutions further complicate the sustainability of these subsidiaries [39][40].

Group 1 - The core viewpoint of the article highlights the stagnation and challenges faced by bank technology subsidiaries in China, with many struggling to achieve profitability and relevance in the market [1][10][30] - The establishment of new technology subsidiaries has significantly slowed down, with only one new subsidiary being formed each year from 2022 to 2024, primarily by smaller banks [2][30] - Many previously pioneering technology subsidiaries, such as Xinyue Shujin and Zhongyin Jinke, are now considering returning to their parent banks, indicating a trend of consolidation and reduced independence [3][30] Group 2 - The newly opened Pudong Bank's technology subsidiary, Puyin Jinke, has been operationally inactive since its establishment in May 2021, and its recent opening signifies a gradual start to business activities rather than a revival of the sector [4][30] - The primary functions of Puyin Jinke include building an IT shared service center for group subsidiaries, supporting non-transactional business system construction for overseas branches, and collaborating with the parent bank to identify non-banking business scenarios [7][30] - The technology subsidiaries have largely failed to establish themselves as independent profit-generating entities, relying heavily on their parent banks for survival [6][10][30] Group 3 - Financial technology subsidiaries have not been able to achieve their initial goals of generating income through technology output, leading to a reevaluation of their operational models [5][6][10] - The financial technology market has become increasingly competitive, with major players like Alibaba and Tencent dominating the financial cloud market, leaving bank subsidiaries struggling to gain market share [22][30] - Regulatory changes have imposed stricter requirements on technology outsourcing, further complicating the operational landscape for these subsidiaries [20][30] Group 4 - The article outlines the financial struggles of various technology subsidiaries, such as Zhongyin Jinke, which reported a net profit of only 0.11 million yuan in 2024, and Financial One Account, which has accumulated losses of 7.33 billion yuan from 2017 to 2023 [11][12][30] - The shift from a focus on external technology output to internal service provision has become a common trend among these subsidiaries, as they prioritize serving their parent banks over expanding into the broader market [23][30] - The lack of competitive pricing and operational flexibility compared to external outsourcing firms has diminished the appeal of these subsidiaries, leading to a perception of them as less effective service providers [31][30]