Dining goes digital for Thailand’s street food vendors

November 23, 2017

By Suphanida Thakral

BANGKOK (Reuters) – Bangkok’s famous street-food vendors have joined the digital revolution, embracing payment via Quick Response (QR) barcodes that can be read using smartphones.

Thailand is famous for its traditional street stalls that offer everything from stir-fried noodles to clothes and for many Thais eating out at a pavement stall is part of their daily routine.

Now, some vendors in the capital Bangkok are offering digital transactions after the Bank of Thailand (BOT) last week gave the green light for five banks including Bangkok Bank and Siam Commercial Bank to implement electronic payment systems using QR codes.

“The global trend is towards a ‘cashless society’ as it is more convenient and there is proof of transaction. The QR code system would be most practical in Thailand as less investment is needed on behalf of vendors,” Somsak Khaosuwan, Deputy Permanent Secretary of the Ministry of Digital Economy and Society, told Reuters.

At Samyan Market, a market and shopping area in Bangkok that sells everything from vegetables to handbags, vendors said QR codes were taking off although some shoppers still prefer to use cash, particularly those who are less tech-savvy.

“I don’t need to worry about finding change,” said Kitti Khoonphisitwong, 40, a dried-fruit vendor.

“But most customers, especially older people, find the app a hassle,” he said.

Shoppers in their 20s and 30s said they were more inclined to use the system.

“I often shop online so I have no issue with digital transactions,” said Thanachanok Teesakul, 20, a student.

Scams using fraudulent QR codes are on the rise in China, where digital payments are booming. Somsak said Thailand needs to ensure QR payment systems are secure.

“We need to make people feel comfortable in using the system,” he said.

(Reporting by Suphanida Thakral; Editing by Amy Sawitta Lefevre and Eric Meijer)

YouTube steps up takedowns as concerns about kids’ videos grow

November 23, 2017

By Paresh Dave

(Reuters) – YouTube stepped up enforcement of its guidelines for videos aimed at children, the unit of Alphabet Inc’s Google said on Wednesday, responding to criticism that it has failed to protect children from adult content.

The streaming video service removed more than 50 user channels in the last week and stopped running ads on over 3.5 million videos since June, YouTube vice president Johanna Wright wrote in a blog post.

“Across the board we have scaled up resources to ensure that thousands of people are working around the clock to monitor, review and make the right decisions across our ads and content policies,” Wright said. “These latest enforcement changes will take shape over the weeks and months ahead as we work to tackle this evolving challenge.”

YouTube has become one of Google’s fastest-growing operations in terms of sales by simplifying the process of distributing video online but putting in place few limits on content.

Parents, regulators, advertisers and law enforcement have become increasingly concerned about the open nature of the service. They have contended that Google must do more to banish and restrict access to inappropriate videos, whether it be propaganda from religious extremists and Russia or comedy skits that appear to show children being forcibly drowned.

Concerns about children’s videos gained new force in the last two weeks after reports in BuzzFeed and the New York Times and an online essay by British writer James Bridle pointed out questionable clips.

A forum on the Reddit internet platform dubbed ElsaGate, based on the Walt Disney Co princess, also became a repository of problematic videos.

Several forum posts Wednesday showed support for YouTube’s actions while noting that vetting must expand even further.

Common Sense Media, an organization that monitors children’s content online, did not immediately respond to a request to comment about YouTube’s announcement.

YouTube’s Wright cited “a growing trend around content on YouTube that attempts to pass as family-friendly, but is clearly not” for the new efforts “to remove them from YouTube.”

The company relies on review requests from users, a panel of experts and an automated computer program to help its moderators identify material possibly worth removing.

Moderators now are instructed to delete videos “featuring minors that may be endangering a child, even if that was not the uploader’s intent,” Wright said. Videos with popular characters “but containing mature themes or adult humor” will be restricted to adults, she said.

In addition, commenting functionality will be disabled on any videos where comments refer to children in a “sexual or predatory” manner.

(Reporting by Paresh Dave; editing by Clive McKeef)

Uber paid hackers to cover up massive data breach

November 22, 2017

By Jim Finkle and Heather Somerville

(Reuters) – Uber Technologies Inc paid hackers $100,000 to keep secret a massive breach last year that exposed the personal information of about 57 million accounts of the ride-service provider, the company said on Tuesday.

Discovery of the U.S. company’s cover-up of the incident resulted in the firing of two employees responsible for its response to the hack, said Dara Khosrowshahi, who replaced co-founder Travis Kalanick as CEO in August.

“None of this should have happened, and I will not make excuses for it,” Khosrowshahi said in a blog post. (http://ubr.to/2AmxlQt)

The breach occurred in October 2016 but Khosrowshahi said he had only recently learned of it.

The hack is another controversy for Uber on top of sexual harassment allegations, a lawsuit alleging trade secrets theft and multiple federal criminal probes that culminated in Kalanick’s ouster in June.

The stolen information included names, email addresses and mobile phone numbers of Uber users around the world, and the names and license numbers of 600,000 U.S. drivers, Khosrowshahi said.

Uber passengers need not worry as there was no evidence of fraud, while drivers whose license numbers had been stolen would be offered free identity theft protection and credit monitoring, Uber said.

Two hackers gained access to proprietary information stored on GitHub, a service that allows engineers to collaborate on software code. There, the two people stole Uber’s credentials for a separate cloud-services provider where they were able to download driver and rider data, the company said.

A GitHub spokeswoman said the hack was not the result of a failure of GitHub’s security.

“While I can’t erase the past, I can commit on behalf of every Uber employee that we will learn from our mistakes,” Khosrowshahi said.

“We are changing the way we do business, putting integrity at the core of every decision we make and working hard to earn the trust of our customers.”

Bloomberg News first reported the data breach on Tuesday.

Khosrowshahi said Uber had begun notifying regulators. The New York attorney general has opened an investigation, a spokeswoman said.

Regulators in Australia and the Philippines said on Wednesday they would look into the matter. Uber is seeking to mend fences in Asia after having run-ins with authorities, and is negotiating with a consortium led by Japan’s SoftBank Group <9984.T> for fresh investment. SoftBank declined to comment.

Uber said it had fired its chief security officer, Joe Sullivan, and a deputy, Craig Clark, this week because of their role in the handling of the incident. Sullivan, formerly the top security official at Facebook Inc and a federal prosecutor, served as both security chief and deputy general counsel for Uber.

Sullivan declined to comment when reached by Reuters. Clark could not immediately be reached for comment.

Kalanick learned of the breach in November 2016, a month after it took place, a source familiar with the matter told Reuters. At the time, the company was negotiating with the U.S. Federal Trade Commission over the handling of consumer data.

A board committee had investigated the breach and concluded that neither Kalanick nor Salle Yoo, Uber’s general counsel at the time, were involved in the cover-up, another person familiar with the issue said. The person did not say when the investigation took place.

Uber said on Tuesday it was obliged to report the theft of the drivers’ license information and had failed to do so.

Kalanick, through a spokesman, declined to comment. The former CEO remains on the Uber board of directors, and Khosrowshahi has said he consults with him regularly.

CRIME PAYS

Although payments to hackers are rarely publicly discussed, U.S. Federal Bureau of Investigation officials and private security companies have told Reuters that an increasing number of companies are paying criminal hackers to recover stolen data.

“The economics of being a bad guy on the internet today are incredibly favorable,” said Oren Falkowitz, co-founder of California-based cyber security company Area 1 Security.

Uber has a history of failing to protect driver and passenger data. Hackers previously stole information about Uber drivers and the company acknowledged in 2014 that its employees had used a software tool called “God View” to track passengers.

Khosrowshahi said on Tuesday he had hired Matt Olsen, former general counsel of the U.S. National Security Agency, to restructure the company’s security teams and processes. The company also hired Mandiant, a cybersecurity firm owned by FireEye Inc , to investigate the breach.

The new CEO has traveled the world since replacing Kalanick to deliver a message that Uber has matured from it earlier days as a rule-flouting startup.

“The new CEO faces an unknown number of problems fostered by the culture promoted by his predecessor,” said Erik Gordon, an expert in entrepreneurship and technology at the University of Michigan’s Ross School of Business.

(Reporting by Jim Finkle in Toronto and Heather Somerville in San Francisco; Additional reporting by Joseph Menn and Stephen Nellis in San Francisco, Manolo Serapio Jr in Manila, Byron Kaye in Sydney, and Sam Nussey in Tokyo; Editing by Lisa Shumaker and Stephen Coates)

Amazon tells Australian retailers to prepare for orders from Thursday: sources

November 22, 2017

By Byron Kaye

SYDNEY (Reuters) – Amazon.com Inc has told its Australian sellers to be ready to take orders on Nov. 23, according to a retailer, the first time the global retail juggernaut has given a start date for doing business in the world No. 12 economy.

Australia has long been home to Amazon-registered sellers, but until now they had been limited to sending goods offshore since the $550-billion company did not have any warehouse in the country of 24 million people. This also meant Australians had to wait long and pay sizable shipping costs for deliveries.

Amazon has, however, set up a distribution warehouse in Melbourne city, on the country’s east coast where four-fifths of the population live, and logistics analysts say this will help cut sometimes open-ended delivery times to one or two days.

“There’s a trial starting tomorrow at 2:00 p.m., and (Amazon) is saying that you need to be prepared to receive orders from that point on,” Adam Mills, founder of child internet monitor provider KoalaSafe Inc – an Amazon-registered seller, told Reuters by telephone on Wednesday.

An Amazon representative in Australia declined to comment.

Since Amazon confirmed plans to open in Australia in April, the U.S. company has declined to say when it would begin taking orders. The company said on Nov. 13 it was close to opening for business, without giving a date.

On Wednesday, technology website Lifehacker Australia published what it said was a screenshot of an email from Amazon to some Australian retailers registered to sell goods over its website, saying it would “start an internal testing phase with a small number of customers on Thursday 23 November”.

“You should be prepared to receive orders from this point onward,” added the email, which KoalaSafe’s Mills said he had received and was authentic.

Going live at this time would help Amazon tap into Black Friday demand. Black Friday, the day after the U.S. Thanksgiving holiday, was so named because spending would surge and retailers would traditionally begin to turn a profit for the year, moving from the red into the black.

While Australia does not celebrate Thanksgiving, which falls on Nov. 24 this year, a growing number of its flagging retail sector companies have adopted Black Friday as a day to promote sales ahead of the all-important pre-Christmas season.

“We already use Amazon around the world so it’s just the same as setting up in any other marketplace,” said Mills. “But we’re very excited to see how many sales come through.”

(Reporting by Byron Kaye; Editing by Himani Sarkar)

Tencent on global path as it surpasses Facebook in valuation

November 21, 2017

By Sijia Jiang

HONG KONG (Reuters) – China’s biggest social network and gaming firm Tencent Holdings, which last week reported forecast-beating quarterly results, is close to making Malaysia the first foreign country to roll out its WeChat ecosystem, an executive told Reuters.

Tencent has made a “breakthrough” in gaining an e-payment license in Malaysia for local transactions, and plans a launch early next year, senior vice president S.Y. Lau said in an interview.

The move pits Shenzhen-based Tencent against rival Alibaba Group as they scramble for new growth opportunities outside China. Tencent this week became the first Asian firm to enter the club of companies worth more than $500 billion, and on Tuesday surpassed Facebook in market value.

“Malaysia is actually quite large in the sense that we have 20 million WeChat users, huge potential, and the market is quite warm towards internet products from China,” Lau said.

Southeast Asia, home to more than 600 million people and some of the world’s fastest-growing economies, has been a key battleground for China’s tech titans fighting for deals. Ethnic Chinese make up more than a fifth of Malaysia’s population.

WeChat Pay and Alibaba’s Alipay, which dominate China’s digital payment market, have sought to expand their global footprint, although that push has so far been limited to payment services for Chinese outbound tourists. They can scan-and-pay for purchases in 34 countries or regions via Alipay and 13 via WeChat Pay, according to the companies.

Alipay’s parent company Ant Financial has joint ventures in seven markets for local digital payments services, which operate independently under the partnerships’ brand names.

Alibaba is looking to build a global payment system, while Tencent is more interested in generating traffic for WeChat – two different strategies, some bankers and investors say.

WeChat has more users, but Alipay’s aggregate transaction volume is higher, according to JP Morgan’s John Hall, though other investors note that WeChat Pay can also process large transactions if it’s used on e-commerce platforms.

GLOBAL EXPANSION

One challenge for Tencent, say analysts, is that its success in China cannot be easily exported to other markets.

Tencent is “not in a hurry” to speed up its overseas expansion or increase the monetization rate of its digital assets, Lau said.

“We walk our own path at our own pace … and, to be honest, there is really quite a lot to do in China,” he said.

WeChat, which has ballooned from a messaging app to an all-in-one platform with 980 million monthly active users, could be the “killer product” to spearhead expansion abroad, Lau said, as its embedded payment function draws more services.

WeChat, with an open platform of mini-programs, was a key revenue contributor for Tencent in the third quarter. Social and other advertising revenue rose 63 percent, while payment and cloud helped “other business” post a 143 percent jump

“Honour of Kings”, Tencent’s top-grossing battle game that led an 84 percent increase in quarterly smartphone gaming revenue, also owes its success to the network help of WeChat, and is expected to find it tougher to crack Western markets, analysts say.

Tencent this month delayed the launch of the game’s U.S. edition, “Arena of Valor”, to next year to “further polish additional gameplay and social features”.

After games and social media, most of Tencent’s other businesses are in digital content, including Spotify equivalent Tencent Music and YouTube equivalent Tencent Video, which also makes its own dramas.

CULTURE CHALLENGE

Lau said the ultimate aim was to export culture from China to the rest of the world, rather than the other way round, which he acknowledged was challenging.

“What we’re aiming to create is ‘super IPs’ (intellectual property) that leverage our different businesses from upstream to downstream,” Lau said, citing Disneyland and the James Bond movies as successful practices in the West.

A big business for Tencent’s recently listed publishing arm, China Literature, is to sell its popular novels and have them turned into dramas and video games by Tencent’s other business lines.

Tencent this month announced a plan involving 10 billion yuan ($1.51 billion) of investment to boost its creative content ecosystem, though it gave no time frame for the investment.

Company president Martin Lau – no relation to S.Y. – said on an earnings call last week that Tencent would keep investing in digital content, especially online video, to draw more time from more paying customers.

Overseas acquisitions will remain a key way of enhancing Tencent’s global access and competitiveness, S.Y. Lau said.

Independent technology analyst Richard Windsor said Tencent’s 2016 acquisition of Supercell gave it a strong position in gaming, while the move to buy a stake in social media firm Snapchat is another piece in the jigsaw.

“It increasingly looks as if Tencent is embarking on a circumnavigation of the digital life pie in order to build an ecosystem to challenge the Google, Apple, Amazon, Facebook dominance of consumer digital services,” he said, noting it’s at a “super early stage” in that process.

Tencent will likely seek more overseas acquisitions, Windsor added, which, beyond being expensive, could challenge Tencent in integrating all its digital assets at home and abroad.

Tencent has struggled to monetize its dominance over the Chinese digital life, he said, adding that’s why he sees more upside in Tencent’s market valuation, and prefers it to Alibaba.

(Reporting by Sijia Jiang; Additional reporting by Kane Wu; Editing by Ian Geoghegan)

Marvell Technology to buy rival chipmaker Cavium for $6 billion

November 20, 2017

By Sonam Rai and Laharee Chatterjee

(Reuters) – Chipmaker Marvell Technology Group Ltd said on Monday it would buy smaller rival Cavium Inc for about $6 billion, as it seeks to expand its wireless connectivity business in a rapidly consolidating semiconductor industry.

Shares of Marvell were down 0.8 percent to $20.14, while Cavium was up 7 percent at $81.14 in early trading.

Chief Executive Matthew Murphy, who took the top job a year ago, has been focusing on Marvell’s networking business to counteract declining demand for its chips used in hard disk drives of personal computers.

Murphy last year replaced former CEO Sehat Sutardja and President Weili Dai – a husband-wife team who co-founded the company – after an audit committee questioned their management style and hedge fund investor Starboard Value LP made a host of demands.

Analysts say the new leadership is preparing a number of important new product launches for later this year after refreshing 25 products in 18 months.

The deal is Murphy’s first acquisition at the company.

“With Marvell facing secular challenges on its core chip business, this acquisition is a smart strategic move which puts the company in a stronger competitive position for the coming years,” said GBH Insights analyst Daniel Ives.

A buyout of Cavium would give a boost to the networking ambitions of Marvell, which has clients such as network giants Cisco Systems Inc and Juniper Networks .

Marvell and Cavium combined would be able to better compete with bigger rivals Intel Corp , Qualcomm and Broadcom , Stifel analyst Kevin Cassidy said.

In the last two years, the chip industry has witnessed a series of deals as companies try to gain market share in emerging areas such as automotive technologies and connectivity.

The most recent is a bid by Wi-Fi chipmaker Broadcom for rival Qualcomm for a whopping $103 billion in what could be one of the biggest technology deals ever.

Marvell’s offer of $84.15 – based on the stock’s close on Friday – represents a premium of 11 percent to San Jose, California-based Cavium’s close, according to a Reuters calculation.

Marvell will offer $40 per share in cash and 2.1757 of its shares for each Cavium share.

The exchange ratio was based on a purchase price of $80 per share, Marvell’s share price prior to the first media report of the transaction on Nov. 3.

The chipmaker plans to fund the deal with a combination of cash on hand from the combined companies and $1.75 billion in debt financing, the company said.

Goldman Sachs & Co LLC was the financial adviser to Marvell, while Qatalyst Partners LP and J.P. Morgan Securities LLC were the financial advisers to Cavium.

(Reporting by Sonam Rai and Laharee Chatterjee in Bengaluru; Editing by Arun Koyyur)

Bipartisan Harvard panel recommends hacking safeguards for elections

November 20, 2017

By Joseph Menn

SAN FRANCISCO (Reuters) – A bipartisan Harvard University project aimed at protecting elections from hacking and propaganda will release its first set of recommendations today on how U.S. elections can be defended from hacking attacks.

The 27-page guidebook shown to Reuters ahead of publication calls for campaign leaders to emphasize security from the start and insist on practices such as two-factor authentication for access to email and documents and fully encrypted messaging via services including Signal and Wickr.

The guidelines are intended to reduce risks in low-budget local races as well as the high-stakes Congressional midterm contests next year. Though most of the suggestions cost little or nothing to implement and will strike security professionals as common sense, notorious attacks including the leak of the emails of Hillary Clinton’s campaign chair, John Podesta, have succeeded because basic security practices were not followed.

The ongoing effort is being led by the Belfer Center for Science and International Affairs, based at the Harvard Kennedy School of Government, and is drawing on top security executives from companies including Google, Facebook and the cyber security firm CrowdStrike. The guidebook will be available online (https://www.belfercenter.org/cyberplaybook).

“We heard from campaigns that there is nothing like this that exists,” said Debora Plunkett, a 31-year veteran of the National Security Agency who joined the Belfer Center this year. “We had security experts who understood security and election experts who understood campaigns, and both sides were eager to learn how the other part worked.”

Plunkett said the goal was a digestible outline that was both realistic and helpful, and that leadership buy-in was critical.

The handbook is the first effort from the Belfer Center’s four-month-old Defending Digital Democracy program, whose leadership includes top campaign officials from both the Republican and Democratic parties. Belfer co-director Eric Rosenbach said another guidebook, scheduled for spring, will aim at state election officials, who oversee the actual vote-counting and might also have to deal with propaganda intended to mislead or dissuade voters or sow suspicions about election integrity.

“Deterring information operations is inherently a government responsibility, and the technology firms will decide how to act on their platforms, but state organizations are the victims,” Rosenbach said.

The Belfer Center is also sending students out to the states to understand various voting technologies and procedures. The idea is to recommend best practices for each type of set-up, which could include mandated software updates, paper back-ups and audits.

Thus far, the project has offered no advice for the internet companies that are under fire for allowing Russian advertising and false claims to polarize Americans. That could come later, as could a broader program for quick sharing of threat information.

(Reporting by Jonathan Weber; editing by Diane Craft)

Toshiba $5 billion stock issue results in huge dilution but delisting risk removed

November 20, 2017

By Makiko Yamazaki and Ayai Tomisawa

TOKYO (Reuters) – Toshiba Corp’s plan to raise some $5.4 billion through a sale of new shares will help it avoid a delisting, but will also see more than 30 overseas investors, including activist funds, own 35 percent of the embattled conglomerate.

The move, decided at a board meeting on Sunday, will allow Toshiba to pay off billions of dollars in liabilities at its bankrupt U.S. nuclear power business, Westinghouse. That in turn gives it the funds to return to positive net worth by the end of the financial year in March, as an $18 billion sale of its prized memory chip unit is unlikely to close before then.

The issue of 2.28 billion new shares at 262.8 yen per share, a 10 percent discount to Friday’s close, will result in a massive 54 percent dilution in earnings per share.

Toshiba’s shares were, however, down just 5 percent in early afternoon trade as the delisting risk was removed and as the capital raising had been expected. The stock was last trading at 277 yen – a level above the sale price.

“Toshiba’s fund raising news eliminates the risk of Toshiba being delisted so that part is positive,” said Takatoshi Itoshima, chief portfolio manager at Commons Asset Management.

“What’s also positive is that the fund raising will improve the company’s financial health. There is an argument that the company will be left with nothing (without the chip business), but it’s good that the company’s capital will recover.”

Third Point LLC, Oasis Management Company and Cerberus Capital Management were among the more than 30 investors which invested through some 60 funds.

Singapore-based fund Effissimo Capital Management, established by former colleagues of Japan’s best-known activist investor, Yoshiaki Murakami, will become the largest shareholder in Toshiba with an 11.34 percent stake.

Payments for the new investment are due to be completed on Dec. 5.

Toshiba also confirmed that it is looking at selling Westinghouse assets.

Sources told Reuters in September that Westinghouse is working with investment bank PJT Partners Inc on a sale process.

Private equity firms Blackstone Group LP and Apollo Global Management LLC have teamed up to bid for the business while Cerberus Capital Management LP was in talks with U.S. nuclear power plant component provider BWX Technologies Inc about submitting a joint bid, the sources said at the time.

Toshiba had initially planned to use funds from the sale of its chip unit to cover its Westinghouse liabilities, but a highly competitive and contentious auction process led to delays in deciding on the buyer and has meant that Toshiba may not obtain the necessary anti-trust clearance by the end of March.

The chip deal still faces legal challenges from its chip joint venture partner Western Digital, which argues no deal can proceed without its consent and has sought an injunction through an international arbitration court.

Toshiba is demanding that Western Digital drop the litigation as a condition over a coming round of a joint investment in Toshiba’s new flash-memory chip production line in Yokkaichi, Japan. The two companies held talks in the United States last week for settlements, but have yet to agree on details, sources familiar with the matter said.

(This story adds dropped word “than” in first paragraph, clarifies number of investors in paragraph 7.)

(Additional reporting by Ran Kim and Naomi Tajitsu in Tokyo and Miyoung Kim in Singapore; Editing by Edwina Gibbs)

Driverless cars set for UK budget boost: finance ministry

November 19, 2017

LONDON (Reuters) – British finance minister Philip Hammond’s budget statement this week will include measures to encourage the development of driverless and electric cars, artificial intelligence and telecommunications, the finance ministry said on Sunday.

Hammond is under pressure to turn around the fortunes of Prime Minister Theresa May with Wednesday’s budget, but with Brexit weighing on the economy he has limited options.

Measures to drive technological improvements would chime with his desire to improve UK productivity, which is growing very slowly, and create high quality jobs.

The finance ministry said Hammond would announce regulatory changes to the driverless car industry so that developers could apply to test their vehicles on UK roads without a human operator for the first time. He wants fully self-driving cars to be on UK roads in as little as three years.

The ministry said a new 400 million pound ($530 million) Charging Infrastructure Investment Fund would also be created, improving access to finance for businesses to develop charge points across the UK. Also 100 million pounds would be provided in grants to help people buy battery-electric vehicles.

Other investments include 75 million pounds in the artificial intelligence industry, 160 million pounds for next-generation 5G mobile networks across the UK, 100 million pounds for an additional 8,000 computer science teachers and 76 million pounds to boost digital and construction skills.

On Saturday the finance ministry said the budget statement was expected to include a consultation on taxing and charging environmentally damaging single-use plastics. 

(Reporting by James Davey; Editing by Toby Chopra)

China Citic, Baidu launch direct bank in fintech push

November 18, 2017

BEIJING (Reuters) – China Citic Bank Corp <601998.SS> and search engine giant Baidu Inc launched on Saturday a direct banking joint venture, dubbed AiBank, to capitalize on China’s rapidly growing fintech sector.

AiBank is one among several tie-ups between an internet firm and a lender in China’s booming online finance market where technology gurus like Alibaba Group Holding Ltd and Tencent Holdings Ltd <0700.HK> have already set up their own finance arms to offer a range of financial products including payment, wealth management and micro loans.

A direct bank offers services over the internet instead of through physical branches.

AiBank will focus on lending to individuals and small businesses while leveraging big data and artificial intelligence to build new risk control models, Li Rudong, president of the new bank said at a launch event in Beijing.

Li said 60 percent of the new bank’s employees will be technology staff.

“AiBank is the future of intelligent finance…It is an institution that understands customers best and understands finance best,” said Baidu Chief Operating Officer Lu Qi.

Mid-tier lender Citic Bank owns 70 percent of the joint venture, while Baidu controls the remaining 30 percent. The direct bank has a registered capital of 2 billion yuan.

China’s banking regulator approved the establishment of AiBank earlier this year.

(Reporting by Shu Zhang and Elias Glenn; Editing by Muralikumar Anantharaman)