Chinese banks have moved to set up investment funds to acquire overseas financial technology companies, hoping to harness technical innovation in the financial sector, or the so-called fintech wave that is poised to disrupt the traditional banking business.

Fintech involves, among other things, new technologies like machine learning, predictive behavioral analytics and data-driven marketing. It involves improved data analytics helping institutional clients further refine investment decisions.

Smaller joint-stock commercial banks and city commercial banks in China are taking the lead as some of them will soon establish their own fintech funds, said Nicole Zhou, associate partner at consulting firm McKinsey & Co.