OneConnect has developed a smart legal contracting system. The company was founded as the fintech offshoot of Ping An, one of China’s largest insurers and is preparing for an IPO. The ALFA smart contract cloud solution is being rolled out across divisions of Ping An. It covers seven financial sectors including banks, funds, securities, trusts, leasing, futures and insurance.
The fintech gave an example of Asset-Backed Securities (ABS). To put together the contracts for managing an ABS plan often takes two people two to three weeks of work. Now it takes just half an hour.
“The current value of ABS assets traded with smart contracts is as much as 100 billion yuan ($13 billion), and the time for writing contracts is 85% less,” said Pan Ling, deputy general manager of OneConnect (via Google Translate) talking to the Securities Times.
At the heart of the system are standard contract templates, more than a thousand of them. OneConnect has leveraged the archived contracts from the Ping An Group and artificial intelligence. So templates are registered on a blockchain, as are edits, generating the contract as well as logging the contract’s performance. Where parties need something more customized, that’s also accommodated.
For now, the ALFA platform is being used within Ping An, but there are plans to roll it out externally. It has announced letters of intent with Yingmi Fund and regional bank Sanxiang Bank.
Trade finance initiatives
OneConnect is also known for its blockchain initiatives in trade finance and supply chain finance. It is the developer of eTradeConnect the trade finance platform from the Hong Kong Monetary Authority. Plus it produced a supply chain finance solution called One Enterprise Chain.
This is part of a flurry of OneConnect product announcements. The company also announced several AI driven insurance tools, especially to address fraudulent claims and claims automation. For vehicles, its Smart Flash Compensation Solution covers 70,000 car models, 120,000 repair facilities and 35 million records of parts and work hours for repairs.
The fintech is gearing for an IPO to raise $1 billion which the South China Morning Post says is likely to be in September in New York. Previously it was assumed the listing would be in Hong Kong. The newspaper states that ongoing trade tensions are making New York more attractive to Asian issuers. That’s in part the result of the poor performance of recent IPOs in Hong Kong. Only six of the largest 20 IPOs that began trading in 2018 are above the debut price.
In May, Reuters reported that Goldman Sachs, JPMorgan and Morgan Stanley were selected to work on the IPO. In 2018 OneConnect had revenues of 1.56 billion yuan ($230 million) and is looking for a valuation of $8 billion according to sources.