OneConnect Divests Its Cloud Arm Amidst Customer Losses From Related Parties

OneConnect Financial Technology, a key associate of the Chinese insurance giant Ping An, is facing a substantial shift in its business landscape. The company, traded under the ticker symbol OCFT, had a formidable presence in the financial technology sector with its innovative cloud services. However, recent developments indicate a drastic revamp as OneConnect determines to shut down its cloud services division. The magnitude of this decision can be gauged by the fact that the cloud segment represented nearly half of OneConnect's revenue.

Dependence on Inner Circle Leads to Vulnerability

The closure of the cloud services arm can be attributed to the substantial loss of its customer base, which significantly consisted of clients within its corporate family and other closely related entities. This scenario has brought to light the relatively high risk associated with Chinese firms that leverage intercompany dealings excessively. OneConnect's decision to retract from this vertical emphasizes the need for diversified and independent client sourcing strategies, especially for organizations aiming for a sustained presence in the global market.

About Lufax Holding

LU - Lufax Holding Ltd, another notable fintech enterprise, operates largely within the personal financial services sector in China. Like OneConnect, Lufax is deeply intertwined with its Chinese roots, with its headquarters planted in Shanghai.

OneConnect, Lufax, Divestment