Peak Fintech will integrate Zhongke’s AI-based software into its Lending Hub platform, allowing the firm to strengthen its position in SME lending in China
Peak Fintech Group, a financial technology services provider to the Chinese commercial lending sector, has agreed to acquire Zhongke Software Intelligence (Zhongke), a banking artificial intelligence (AI) software developer, for C$20m ($15.6m).
Zhongke is a developer of analytics and AI software for Chinese banks and financial institutions to help them make decisions on loan and credit applications and to process and manage the applications.
Zhongke is also a strategic partner for China UnionPay, the country’s largest POS electronic funds transfer network and the only interbank network linking all the ATMs across China. Presently, Zhongke’s software is being used by 34 banks and financial institutions.
The intellectual property (IP) portfolio of the software developer includes three patents, 42 copyrights and three trademarks. The firm claims that all of its software is CMMI Level 3 compliant, a standard established by Carnegie Mellon University.
Peak Fintech CEO Johnson Joseph said: “With this acquisition and the eventual integration of Zhongke’s software to Lending Hub, Peak will be in a position to offer China’s thousands of small banks, whether located in large cities, small towns or rural regions, an end-to-end solution to automate their commercial lending activities, including bringing them new clients.
“With the integration of the platform, we also expect the AI components of both Lending Hub and Zhongke’s software to continuously improve as they share data with each other.
“We believe that the insight that Peak will have into these transactions, with data points coming from the banks’ internal systems coupled with data points on the operations of the small businesses that are part of the Lending Hub ecosystem, will be exceptional, if not unprecedented. The value of the combination of that data can’t be overstated.”
As per the terms of the agreement, Peak and Zhongke will first partner on a pilot financing programme targeting the restaurant industry and Zhongkes’ banking clients. The pilot is expected to run for a period of three months.
Zhongke founder and CEO Changshu Hu said: “When we understood Peak’s vision with the creation of the Lending Hub ecosystem and the important role that our software would play in helping bring that vision to life, the decision to join the Group was an easy one.
“I look forward to finalising our agreement as quickly as possible and couldn’t be more excited about the impact that I believe we will have on the automation of commercial lending to genuinely help small businesses across the country reach their full potential.”