Alibaba | FinTech on ii

CONTENTS

1. Introducing FinTech on the Cloud 1 4. Customer Stories 15

FinTech Business Challenges 2 Asakita: FinTech E-Lending 15 Alibaba Cloud Fintech on the Cloud 3 Revenue Monster: FinTech E-Payments 17 Our Products 3

References 18 2. Benefits 4 About 19 #1 Customer Satisfaction through Low Latency 4 #2 Resources for Your Core Business 4 #3 Fast Go-to-Market and Cross-Regional Expansion 5 #4 System Reliability 6 #5 Brand Reputation 6 #6 and Performance 7 #7 Cost-Efficiency 7 #8 Extensive Execution 8

3. Use Cases 9

#1 FinTech Startup on the Cloud 9 #2 FinTech Expansion in the Cloud 11 #3 FinTech migration to the Cloud 13 Alibaba Cloud | FinTech on Alibaba Cloud 1

1. INTRODUCING FINTECH ON THE CLOUD

The FinTech industry has undergone a period of rapid growth, thanks to advancing digitization and the integration of smart devices into our day-to-day lives. As a result, a range of innovative e-lending and e-payment solutions now exist, helping customers around the world gain access to these financial services. This is especially true in emerging markets, where traditional financial services companies are not growing quickly enough or providing the level of ubiquitous that FinTech companies can seamlessly provide, thanks to their impressive accessibility.

Yet, the FinTech market has many challenges to address. For example, while customers expect affordable and intuitive e-lending and e-payment products and services, FinTechs can struggle to keep pace with user demand for their services and stay within the regulations of the financial sector. As such, FinTechs must design, deploy and maintain a scalable and cost-effective IT infrastructure to support the level of growth and innovation they require to compete in this dynamic market.

The Alibaba Cloud FinTech on the Cloud solution addresses all of these challenges. Using our solution, FinTech companies can delegate their infrastructure management to the cloud and focus their efforts on business development. This cost-effective solution helps FinTech companies boost end user satisfaction and expedites their time-to-market. What’s more, thanks to the cloud, FinTechs can elastically scale up and down with full control while complying with the industry’s tight regulatory requirements. Alibaba Cloud | FinTech on Alibaba Cloud 2

FINTECH BUSINESS CHALLENGES

FinTech businesses are disrupting the financial services market by challenging traditional products and services with new business models to provide seamless accessibility to the end user. However, FinTech companies also face many business challenges to bring their services to market and survive in this highly competitive market.

High Customer Expectations

Compared to traditional financial incumbents, FinTech customers expect a better level of service, which is not only fast and intuitive, but also complies with the industry’s complicated regulatory requirements. To achieve this, FinTech companies must develop smart customer service models where they can respond to user enquiries in near real-time. Such relentless customer expectations often push FinTech companies toward agile development processes to enable frequent and iterative product rollouts to meet these demands.

High Business Growth with Limited Resources

Most FinTech businesses are start-ups and, as such, have limited resources to drive the required level of business growth. What’s more, many FinTech companies must support a range of complex MOST FINTECH BUSINESSES HAVE business processes, including Know Your Customer (KYC) LIMITED RESOURCES processes, the integration of third-party products and services, and TO DRIVE THE the industry’s internal and external reporting requirements. This REQUIRED LEVEL OF BUSINESS GROWTH combination of factors presents many CTOs with the challenge of selecting the right technical platform to support business growth.

High Business Continuity Requirements

Both regulators and customers require any financial transaction to be processed accurately, rapidly and with near-zero downtime. Therefore, companies operating in the financial services sector must minimize potential service instabilities and data inaccuracies. As such, FinTech companies need solid business continuity capabilities where they design, deploy and maintain a reliable, highly available platform with robust but cost-effective disaster recovery measures in place. Alibaba Cloud | FinTech on Alibaba Cloud 3

ALIBABA CLOUD FINTECH ON THE CLOUD

The Alibaba Cloud FinTech on Cloud solution is a key enabler to support the ever-changing FinTech industry. Our solution improves service reliability, availability and performance for the world’s FinTech businesses to free your IT department from hosting and maintenance responsibilities, and enabling you to focus on business development to not only survive but thrive in the years ahead.

OUR PRODUCTS

In this guide, we will introduce a range of our cloud- based products and solutions. In particular, we will investigate the following Alibaba Cloud products, which are fundamental solutions for the FinTech market:

1. Relational Service (RDS): Our fully managed database service, which supports 90 percent of mainstream database engines and can scale up your read capacity on demand. 2. POLARDB: Our high-end cloud-based database product, which provides the performance and availability of traditional enterprise and the flexibility and cost-effectiveness of open-source databases. 3. ApsaraDB for MongoDB: A secure, reliable, and elastically scalable cloud NoSQL database service. It currently supports both the ReplicaSet and Sharding architectures and can be quickly deployed in just a few steps. 4. (WAF): An easy-to-use service that provides real-time monitoring and protection of your servers to ensure high availability. 5. Elastic Compute Service (ECS): Our online compute service, which offers elastic and secure virtual machines that cater to all your cloud hosting needs. Alibaba Cloud | FinTech on Alibaba Cloud 4

2. BENEFITS

The Alibaba Cloud for FinTech solution provides a vast range of benefits, helping the FinTech industry to not only address the challenges outlined in the previous section, but also create real value for businesses.

#1 CUSTOMER SATISFACTION THROUGH LOW LATENCY

Customers today demand incredibly fast response times online, particularly from consumer-facing FinTech companies that only interact with their users in this way. As a result, fast transaction processing, coupled with a low-latency and dependable infrastructure, are key components to ensure customer satisfaction.

To address these needs, Alibaba Cloud uses a global, distributed infrastructure, which is scalable, reliable and delivers low latency to meet your customers’ expectations.

FinTech companies can focus on developing their core business and achieve better customer satisfaction.”

#2 RESOURCES FOR YOUR CORE BUSINESS

FinTech companies can delegate their operations and management tasks to Alibaba Cloud. As a result, you only need to pay for what you use, and do not have to worry about maintaining and upgrading any hardware. Alibaba Cloud | FinTech on Alibaba Cloud 5

By eliminating the heavy lifting of infrastructure maintenance, FinTech companies can focus on developing their core business and achieving better customer satisfaction.

#3 FAST GO-TO-MARKET AND CROSS-REGIONAL EXPANSION

To continuously attract customers and drive business growth, FinTech businesses must frequently release new products, upgrade their existing applications, and launch timely marketing campaigns.

Thanks to the Alibaba Cloud infrastructure, FinTech companies can elastically scale their resources up and down to meet demand.

Additionally, with 61 availability zones in 20 regions worldwide and an extensive network of 2,500+ CDN nodes and 110+ Point of Presence nodes, FinTech businesses can rapidly establish a strong global presence with high scalability and availability using Alibaba Cloud’s extensive worldwide infrastructure.

Our Regions outside Mainland

Region name City Region ID Zones

China () Hong Kong cn-hongkong 2

Singapore ap-southeast-1 3

Australia (Sydney) Sydney ap-southeast-2 2

Malaysia (Kuala Lumpur) Kuala Lumpur ap-southeast-3 2

Indonesia (Jakarta) Jakarta ap-southeast-5 2

India (Mumbai) Mumbai ap-south-1 2

Japan (Tokyo) Tokyo ap-northeast-1 2

US () Silicon Valley us-west-1 2

US (Virginia) Virginia us-east-1 2

Germany (Frankfurt) Frankfurt eu-central-1 2

UK (London) London eu-west-1 2

UAE (Dubai) Dubai me-east-1 1 Alibaba Cloud | FinTech on Alibaba Cloud 6

Our Regions outside Mainland China

Region name City Region ID Zones

China (Qingdao) Qingdao cn-qingdao 2

China () Beijing cn-beijing 8

China (Zhangjiakou) Zhangjiakou cn-zhangjiakou 2

China (Hohhot) Hohhot cn-huhehaote 2

China () Hangzhou cn-hangzhou 8

China () Shanghai cn-shanghai 6

China (Shenzhen) Shenzhen cn-shenzhen 5

China (Heyuan) Heyuan cn-heyuan 2

China (Chengdu) Chengdu cn-chengdu 2

#4 SYSTEM RELIABILITY

Our solution provides high system reliability and ensures that all transactional, customer, and merchant information is processed accurately and protected safely with near-zero downtime, helping FinTech companies meet regulatory requirements at low cost.

For example, we recently unveiled an upgraded Service Level Agreement (SLA) with a heightened availability commitment for our Elastic Compute Service (ECS) solution – providing an industry- leading 99.995 percent availability rate for services across multiple zones within a region.

#5 BRAND REPUTATION

Alibaba Cloud is a world-renowned cloud services company. As a business unit of the , we provide an extensive range of cloud-based products and solutions to more than one million paying customers. We are also the official Cloud Services Partner of the International Olympic Committee. Alibaba Cloud | FinTech on Alibaba Cloud 7

That’s not all. We are highly regarded by the world’s top industry analyst firms. For example, according to Gartner Market Share Analysis: IaaS and IUS, Worldwide, 20181, we were the world’s third largest Infrastructure-as-a-Service (IaaS) provider by revenue in 2018. Alibaba Cloud is the largest public cloud service provider in China by revenue in 2019 H1, according to IDC's November 2019 report.2 What’s more, Gartner ranked Alibaba as the number one player in the “Visionaries” quadrant of the 2018 Gartner Magic Quadrant review.3

#6 TECHNOLOGY AND PERFORMANCE

With more than 10 years of experience in the industry, our technology and performance have stood the test of time.

For example, every year, the Global Shopping Festival known as Double 11 puts our networking capabilities to the test. Our comprehensive range of cloud-based products and services play a vital role in reducing traffic peaks and enabling successful payments for millions of shoppers. Each year has been more successful than the last, thanks to our sophisticated network services. In 2019, Double 11 recorded RMB 268.4 billion gross merchandise volume (GMV), setting yet another Double 11 record, and attracting an increasing number of overseas consumers.4

#7 COST-EFFICIENCY

Alibaba Cloud provides a range of cost-effective solutions. Due to the nature of the cloud, the operational and maintenance costs associated with an on-premise solution are eradicated. Plus, we provide pay-as-you-go options and a low-rate subscription service, giving you a choice of pricing models to meet the needs of your organization.

Our solutions also provide many cost advantages when compared to other products and services available in the market. For example, POLARDB costs only a tenth as much a traditional database would cost. Alibaba Cloud | FinTech on Alibaba Cloud 8

#8 EXTENSIVE EXECUTION

The Alibaba Cloud FinTech on the Cloud solution has been tested across a broad range of scenarios in the industry. We will look at two of these examples in more detail in Section four but, to summarize, these include:

» Revenue Monster – delivers a unique blend of payment, social media, and loyalty merchant solutions to help businesses to engage with its customers using its Fintech (FaaS) and Financial Cloud solutions. » LifeByte – provides a fair, transparent and reliable FinTech platform for financial professionals and financial institutions around the world. » Asakita – provides a peer-to-peer lending online platform THE ALIBABA CLOUD through its customized micro loan services. Its main business FINTECH ON THE goal is to verify users and disburse loan funds in just five CLOUD SOLUTION HAS BEEN TESTED ACROSS minutes. A BROAD RANGE OF » TNG Digital – provides a mobile wallet using the same Alibaba SCENARIOS Cloud Infrastructure-as-a-Service (IaaS) platform as for mobile payments. » Cynopsis Solutions – helps clients in the financial services and professional services sectors to comply with their regulatory requirements, focusing on anti-money laundering (AML), counter- terrorism financing (CTF) and Know Your Customer (KYC). » Oniontech – operates globally, offering travelers and refund agencies an easy and affordable way to get tax refunds. Alibaba Cloud | FinTech on Alibaba Cloud 9

3. USE CASES

In this section, we will examine three common FinTech industry use cases, identifying the challenges and solutions for each scenario and explaining how the Alibaba Cloud FinTech on the Cloud solution both tackles the customer challenges and adds real business value for each fictional FinTech company in question.

#1 FINTECH STARTUP ON THE CLOUD

Scenario: You’re a FinTech startup, providing both an e-lending and e-payment solution to your customers. You are mainly targeting e-commerce stores, providing a third-party solution to enable seamless and fast online payments and loans for their goods. You need a cost-effective infrastructure that is reliable, scalable and stable.

Your platform uses the following business models for each e-lending and e-payment service:

Lending Process

With Top-up 3rd payment draw

raw Len Withd ding

Personal info Platform Borrower Register Authenticate Submit Loan Platform Verify Audit Credit

Query Cred it

Credit Data Alibaba Cloud | FinTech on Alibaba Cloud 10

Solution: We would recommend you deploy the following infrastructure, based on Alibaba Cloud’s network:

This solution provides the scalability you require to meet user demands, but without any high upfront costs. The infrastructure is also deployed across two zones, providing added resilience to mitigate the risks of downtime in one zone. As a result, you can meet your business continuity requirements and high user satisfaction standards.

This infrastructure also implements several of our core cloud-based products and services. When your service is accessed from the , the requests first pass through our Server Load Balancer (SLB) instances. SLB distributes traffic among multiple ECS instances at both the application and web server level, responding to sudden traffic spikes to minimize your service response times. This service not only prevents single point of failures (SPOFs) and improves the availability and fault tolerance of your e-lending and e-payment applications, but also supports high availability across zones, providing a failover within 30 seconds. Alibaba Cloud | FinTech on Alibaba Cloud 11

Our database hosting allows you to elastically scale your database instances on demand. In this scenario, both our ApsaraDB for MongoDB and ApsaraDB for solutions are implemented, which provide automated monitoring and backup and disaster recovery capabilities when a transaction is processed.

All of this data is stored in Service (OSS), which encrypts this sensitive information, allowing you to store, back up and archive large amounts of transactional data, with a guaranteed durability of 99.999999999 percent.

Our WAF and Anti-DDoS services also provide an additional later of application security, offering a highly secure solution across both your infrastructure and applications.

#2 FINTECH EXPANSION IN THE CLOUD

Scenario: Your FinTech business is currently based on the West Coast of the and you want to expand your business across the US, before targeting other global regions, including Mainland China. To ensure the availability of your e-lending and e-payment services, you want to implement your back-end systems in a different region compared to the region where your customers and business applications are located.

Solution: We would recommend the following infrastructure, which allows your FinTech business to quickly connect different regions thanks to Alibaba Cloud global networks. Alibaba Cloud | FinTech on Alibaba Cloud 12

As you can see, many of the services we used in the previous scenario are present in the business region of this solution, including our WAF and Anti-DDoS security services and RDS database solutions. The ApsaraDB for Redis solution is a fundamental component of this infrastructure, providing a key value database service that offers in-memory caching and high-speed access to connect your services with your customers as your business continues to expand.

Our NAT Gateway service also helps you establish an Internet gateway for your VPC, allowing more flexible use of your network resources while providing up to 10GBps forwarding capacity and cross-zone disaster recovery.

The back office region is connected to your business region using our Cloud Enterprise Network (CEN) solution. CEN provides the FinTech industry with a way to distribute your business systems across any regions on our network to give your e-lending and e-payment services the availability your customers demand.

FinTech companies can focus on developing their core business and achieve better customer satisfaction.

For example, you can create a CEN instance to connect your VPCs between the US (Silicon Valley) and US (Virginia) regions. Once you have connected the regions, you simply purchase a bandwidth package and set up your required amount of cross-region bandwidth. When you expand to other regions, you can use other CEN instances to seamlessly create a global network of resources using the same method. This includes Mainland China, where our China Gateway service can help you enter this market, providing you with a range of tailored solutions to tackle the issues businesses often face when entering China. Alibaba Cloud | FinTech on Alibaba Cloud 13

The back office also uses our Elastic IP Address (EIP) service to ensure the high quality of your public network across regions. EIP provides you with an independent public IP resources that decouples ECS and your public IP resources, allowing you to flexibly manage your public IP resources. This further enhances the availability of your e-lending and e-payment services, preventing SPOF incidents and supporting cross-zone disaster tolerance.

#3 FINTECH MIGRATION TO THE CLOUD

Scenario: Your established FinTech business is using a hybrid cloud solution, which includes an on-premise and cloud services from another vendor. But, as demand for your e-lending and e-payment services increases, this infrastructure does not provide the flexibility and availability that you need to grow your business. Plus, you experience regular service outages due to faults on the network. So, you decide to migrate to Alibaba Cloud. However, you want to complete this migration with minimal disruption to your business and for terabytes of existing data.

Solution: Our expert team has a proven track record in migrating services from both on-premise data centers and other cloud vendors to Alibaba Cloud with our dedicated Cloud Migration Service. This service includes the technical support you need to smoothly migrate your FinTech business systems, databases and storage to Alibaba Cloud.

This migration service is applicable to a range of cloudification scenarios, helping reduce the technical risks and costs of this service. Our service covers a pre-migration evaluation of your current infrastructure and business and migration planning services, before we migrate your data and business applications to the cloud.

Our migration service also includes our Data Transmission Service, which supports the migration and synchronization of your data between different data engines, including your relational databases, NoSQL and OLAP repositories. Alibaba Cloud | FinTech on Alibaba Cloud 14

Our Data Transfer Plan is available at a range of affordable prices, depending on your existing data needs. For example, your data transfer plans can be used with our Pay-As-You-Go ECS, EIP, and SLB services whenever possible in the corresponding area to save traffic costs, providing you with a highly cost-effective and easy- to-manage solution.

The following diagram highlights the main steps during an Alibaba Cloud migration: Alibaba Cloud | FinTech on Alibaba Cloud 15

4. CUSTOMER STORIES

In this section, we will look at two customer stories in the e-lending and e-payments FinTech sectors. With more than ten years of experience in the cloud, Alibaba Cloud has helped a broad range of cross-industry companies both large and small to leverage of extensive solutions to grow and improve their business. To find out more, please see: https://www.alibabacloud. com/customers.

ASAKITA: FINTECH E-LENDING

Asakita is a leading online peer-to-peer lending platform in , which provides a customized micro loan service. Its products are made to simplify the long-winded verification processes for loans, facilitating the disbursement of loan funds in just five minutes.

Scenario: Asakita needed to implement its systems on a stable and proven cloud-based platform that provided high-performance and a scalable, containerized application management service. The cloud platform must also include a local data center in Indonesia in order to address the Data Sovereignty issues of its operating region.

Solution: Because of its a micro service application architecture, Asakita needed a Docker-based platform for enterprise-level containerized applications and as cluster management system that can be easily managed throughout its entire application lifecycle. Alibaba Cloud | FinTech on Alibaba Cloud 16

So, Asakita used the Alibaba Cloud Container Service for Kubernetes as this ensures a reliable and consistent experience, provides workload portability, and also provides the scalability and stability that is required by its application.

What’s more, the Alibaba Cloud is both a Kubernetes Certified Service Provider (KCSP) and has also qualified under the Certified Kubernetes Conformance Program.

Our Kubernetes platform makes it easy for Asakita to scale-out and scale-in its resources, adapting to fluctuating demands and delivering a consistent performance and experience to Asakita’s end users. This highly adaptive Kubernetes platform also helps Asakita optimize its costs, based on the company’s actual usage.

What’s more, thanks to our local data center presence, Asakita can host its applications on Alibaba Cloud while addressing the Data OUR KUBERNETES Sovereignty requirements from its local regulators. PLATFORM MAKES IT EASY FOR ASAKITA Going forward, Asakita and Alibaba Cloud will continue to develop TO SCALE-OUT AND SCALE-IN ITS increasingly personalized and consistent end-user experiences for RESOURCES the FinTech company’s Indonesian customers. Asakita is also looking to implement our OSS to store its data. Alibaba Cloud | FinTech on Alibaba Cloud 17

REVENUE MONSTER: FINTECH E-PAYMENTS

Revenue Monster is a -based FinTech business that provides a combination of payment, social media, and loyalty merchant mobile payment solutions to its financial institution clients using its Fintech-As-A-Service (FaaS) and Financial Cloud solutions.

Scenario: Revenue Monster requires a cloud-based infrastructure that can provide the high availability, robust security, and auto- scaling capabilities to enable its continued growth and meet the demands of its increasing client base.

Solution: Alibaba Cloud helped Revenue Monster implement a containerized application infrastructure with the required levels of stability, security and operational effectiveness. This cloud-based infrastructure included out ECS, RDS, EIP and OSS solutions to help Revenue Monster meet its availability, security and auto-scaling requirements.

With the support of Alibaba Cloud's infrastructure and Revenue Monster’s PaaS platform, Revenue Monster's business and clients can now achieve millions of transactions in a day and 99.99 percent or above availability in a year. The company can also enjoy the benefits of real-time cloud monitoring and our other value-added services, including analytics, data visualization, and , to name a few.

What’s more , Revenue Monster is the first organization in Malaysia to implement a cloud infrastructure that complies with the country’s Central Bank requirement. Alibaba Cloud | FinTech on Alibaba Cloud 18 REFERENCES

At Alibaba Cloud, we work with a range of FinTech companies, helping them get innovative products and services to market.

If you’d like to try our extensive suite of products and services, you can sign up for an Alibaba Cloud free trial service. Here, you can access up to $450 (for individuals) or $1,300 (for enterprises) worth of products and services across our platform.

If you would like to learn more about Alibaba Cloud and how we can help your business, please contact us at www.alibabacloud.com/contact-sales.

Or, if you’d like to find out more about the products and services mentioned in this guide, please click on the links below:

1. https://www.gartner.com/en/newsroom/press-releases/2019-07-29-gartner-says-worldwide-iaas- public-cloud-services-market-grew-31point3-percent-in-2018

2. https://www.idc.com/getdoc.jsp?containerId=prCHE45626919

3. https://www.alibabacloud.com/about/analyst-reports

4. https://www.cnbc.com/2019/11/11/alibaba-singles-day-2019-record-sales-on-biggest-shopping- day.html

ABOUT

Established in September 2009, Alibaba Cloud is the arm of Alibaba Group and develops highly scalable platforms for cloud computing and data management.

It provides a comprehensive suite of cloud computing services available from www.alibabacloud.com to support participants of Alibaba Group’s online and ecosystem, including sellers and other third-party customers and businesses.

Alibaba Cloud is a business within Alibaba Group which is listed on the (NYSE) under the symbol BABA. www.alibabacloud.com/contact-sales