Ant Financial: Innovation beyond fintech
If you think that financial technology (fintech) companies focus their efforts solely on financial services, think again. Ant Financial, the Chinese fintech giant renowned for its innovative and widely popular products, is also an innovator when it comes to corporate social responsibility, or CSR.
Ant Financial has developed a social purpose game called Ant Forest (螞蟻森林), which promotes a green lifestyle. Users can cumulate “green energy” via activities such as walking and convert the energy into a virtual tree after reaching certain a level. Ant Financial will then plant a real tree on the customer’s behalf in the Inner Mongolian desert.
At first glance, the game seems wholly unrelated to the company’s core business as a financial services provider. But in fact by developing this seemingly unrelated product, Ant Financial is demonstrating its truly innovative heart. When the lead author Dr. Yanfeng ZHENG, who visited Ant Financial in 2017, and his PhD student Mr. Qinyu WANG discovered the existence of Ant Forest, they wanted to understand why a fintech giant would be interested in developing such a socially beneficial yet financially costly game.
“We started research on this unusual development by a fintech company. Our research revealed that if we truly understand Ant Financial, its origin, culture and products, [then we can see that] the Ant Forest development is indeed an integral component of its CSR strategy, which complements its main services and business operation,” Dr. Zheng explains.
Dr Zheng and Mr. Wang decided to write a teaching case in which they examined Ant Financial’s role as an innovator of fintech products, including Alipay, Ant Fortune and its recently launched insurtech offerings. The case highlights the company’s corporate culture, which fosters creative thinking and the development of innovative products. Meanwhile, the case also cautions readers of unexpected public criticism or regulatory scrutiny that those innovative products brought to the market.
To understand the existence of Ant Forest, they delved into the company’s background and found links between its core business operations and its innovative CSR activities. The case can be used to examine motivations for CSR, how CSR influences corporate behaviour, and suggest how firms can organically integrate CSR practices into their business strategies.
The take-away is holistic approach that looks at both a firm’s business and non-market strategies is more insightful than focusing solely on technological innovation. “The ones who can better integrate the two types of strategies such as Ant Financial with a down-to-earth, innovative culture will enjoy long-term competitive leadership,” concludes Dr. Zheng.
