Jack Ma’s Ant Group will apply to become a financial holding company and face regulatory oversight akin to that of a bank, marking yet another blow to the fintech giant since its IPO pullout in November last year.

After plans for the revamp were first reportedly unveiled in January this year, Ant Group will officially pursue restructuring to become a financial holdings company overseen by the central bank.

According to a government statement, the People’s Bank of China ordered Ant to make overhauls five particular areas: elimination of unfair competition in payments; management of liquidity risks in major fund products; halting a monopoly on information; and improving corporate governance. 

The orders were made in a meeting on Monday by several agencies in addition to the central bank, including the banking and securities regulators. 

«Information Monopoly»

In addition to applying to become a financial holding company, Ant said in a statement that it plans to fold popular online personal lending services Jiebei and Huabei into a single regulated consumer finance firm and improve consumer data protection. 

This will remove linkages between lending and payments – a unit that boasts over a billion users in China and $17 trillion of digital payment transactions processed in 2020 – breaking what Beijing calls an «information monopoly».

«We will put our growth proactively within the national strategic context,» Ant Group said, adding that no effort will be spared to implement the rectification plan. «Returning to its origin, our payment business will serve consumers and SMEs by focusing on micropayments and bringing them convenience.» 

Record Antitrust Fine

The statements issued by Ant and financial regulators come just days after Alibaba Group was slapped with an all-time record-high $2.8 billion antirust fine – a move onlookers noted as a key turning point for the affiliate company.

«Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from all of our constituencies have been crucial to our development,» the company said in a response to the antitrust probe and fine.

«For this, we are full of gratitude and respect.»