In recent months, Beijing Bank, Bank of China, Jiangxi Bank, and other Chinese banks have been merging their standalone app functions into their main mobile banking platforms. The regulatory authorities of the CCP have been pushing for a reduction in the number of applications and entry points, limiting the flexibility of digital transformation for banks and marginalizing the innovation space for small and medium-sized banks.
According to data from the China Internet Finance Association, more than 20 banks, including state-owned banks, joint-stock banks, and several city commercial banks, have ceased operations of their direct banking apps since 2023. The digital transformation of banks is moving from market innovation back to centralized control, signaling the end of the era of innovation experiments.
On October 10th, Beijing Bank announced that its direct banking app and website would cease service starting from November 12th, with related functions being integrated into the main app “Beijing Life”. The announcement cited this move as a “business adjustment”, but several users reported that the app had become inaccessible before the announcement, forcing them to re-register using the main app. According to a report by First Financial website in October, internal bank employees disclosed that the consolidation decision faced “tremendous pressure from higher authorities”, with multiple digital teams being dissolved or integrated into compliance lines.
Yang Yongqiang, a finance industry scholar at Sichuan University, stated in an interview that the integration by Beijing Bank is not an isolated incident but rather a microcosm of the entire industry being forced to consolidate. He said, “Under regulatory pressure, the ‘integration’ by banks is essentially a process where digital innovation is taken over by administrative orders. The business delineation and functionality testing among apps in the past have been canceled, with innovation space giving way to compliance control, resulting in small and medium-sized banks losing operational space.”
Earlier reports by Securities Times website detailed that Bank of China announced at the end of September that its credit card app, “Colorful Life”, would gradually be migrated to the main app before being shut down. Jiangxi Bank discontinued its independent credit card app, “Enjoy Wonderful”, in March, while Bohai Bank ended similar services by the end of 2024. Multiple banks used similar terms in their announcements, all citing “enhanced experience” and “strengthened security” as reasons for the changes.
Yang Yongqiang pointed out that this situation reflects the highly standardized discourse within the industry. Regulation under the guise of safety and compliance has led to a uniform language and entry points, depriving banks of different scales of individual strategic space. Several industry insiders told Observer website that such “proactive integration” is only a formality, with the actual outcome being the result of regulatory cleanup of indicators.
In September of last year, the China Banking and Insurance Regulatory Commission issued a notice regarding the strengthening of mobile internet application management for the banking and insurance industries, requiring financial institutions to establish an app ledger, control the quantity, and promptly exit apps with redundant functionalities or low activity levels. Following the policy implementation, many banks received notifications for self-inspection within a specified period. The regulatory authorities, citing “risk concentration” and “information security”, mandated the reduction of redundant entry points.
Commentator Xu Feng (pseudonym) told reporters that this policy effectively transfers the decision-making power for bank innovation to the compliance department. “Under this new regulation, every technological function of the bank must undergo multi-level approval. I see that the innovation projects of banks have almost come to a halt recently.”
Xu Feng added that in a downward economic environment, regulation often cites risks to establish a highly centralized technical system, turning innovation into an administrative action subject to review. “Banks must obey the regulatory authorities, especially local banks which previously had high flexibility in business. That is no longer the case now.”
According to a report on CCTV’s website earlier this month, over 25 banks were reported for illegally collecting personal data via apps in 2024, with the majority being small and medium-sized banks. Citing data from the China Internet Finance Association in November 2024, the report indicated that 836 financial institutions had filed 2664 mobile financial apps within two years, averaging over 3 apps per institution. The report highlighted that the regulatory requirements to reduce duplicate developments and optimize service entry points have accelerated the integration process.
Several analysts interviewed indicated that the so-called “privacy violations” are just a surface issue, with the real problem lying in regulatory authorities treating individual risks as systematic threats, thereby reinforcing unified control. An article on China News Weekly website quoted Professor Lu Minfeng from Shanghai Institute of Science and Technology Finance at Shanghai University, stating that the deep logic of regulatory “streamlining” is focused on risk concentration and consumer protection. However, the long-term effect may alter market structures, concentrating innovation capability within a few leading banks.
Financial commentators told First Financial website that the wave of bank app shutdowns is more than just technical adjustments; it signifies a structural regression. The digital transformation of China’s banking industry is moving from “multifaceted innovation” to “single control”, signifying the end of an experimental era for direct banking, symbolizing the end of an experimental era for China’s banking industry.
Industry insiders speaking to Observer website pointed out that if the current policies continue, the total number of such apps may decrease by another third within the next year, with banking mobile terminals gradually concentrating on the main app, forming a “one bank, one terminal” pattern. Mr. Fan, a finance scholar from Sichuan, told reporters, “While this centralization may reduce costs, it widens the innovation gap between banks. Small and medium-sized banks are being forced out of technological development, leading to the rapid disappearance of the diversity of financial services.”
On social media platforms, some netizens commented, “One app for savings, another for credit cards, how many bank apps does a phone have to install?” Some sarcastically remarked, “Banks are not innovating now, it’s a competition of feature deletions.” A report on CCTV’s website on November 10th mentioned that the related topic had garnered over ten thousand comments, with many users complaining about the sluggishness and difficulty in accessing the main app after integration.
Since 2014, direct banking has been on the rise in mainland China, aimed at attracting a young clientele with low-cost, branchless services. However, under tightening regulations, direct banking is gradually phasing out. Critics point out that in the past, small and medium-sized banks relied on direct banking apps to attract niche customers, and with these entry points closed, brand visibility has plummeted rapidly. Several regional banks have already ceased their previous online promotions, with their digital business departments merged into the headquarters’ risk control divisions. The digitization of banks has shifted from market competition back to institutional levels, with innovation being replaced by administrative orders.
Many analysts expect the trend of regulatory centralization to continue, signaling a stage where the digital innovation of the banking industry will be subjected to institutional management.