Ant Financial Services, the dominant Chinese fintech company, is shifting its main focus to technology services and away from payments and consumer finance as Beijing's crackdown on financial risk deepens, four sources with knowledge of the matter said.



The company, which is controlled by the Chinese billionaire Jack Ma, plans to accelerate the shift within the next few years, the sources said. They said the move was propelled, in part, by growing regulatory pressure on Ant's core financial businesses, including payments, microlending, credit rating and wealth management.



Ant Financial was spun off from Alibaba, which went public in 2014, and has played a major role in shaping the financial technology landscape in China. Its Alipay online payment app is one of the biggest players in an increasingly cashless society.



But in five years, technology services will make up 65 percent of Ant Financial's revenue, compared with an estimated 34 percent in 2017, according to confidential company projections viewed by Reuters. That would involve helping banks and other institutions with services like online risk management and fraud prevention.



Meanwhile, revenue from financial services is projected to shrink to 6 percent from an estimated 11 percent, and the contribution from payments will be reduced to 28 percent from an estimated 54 percent in 2017, the figures show.



Overall revenue is projected to grow at 40 percent annually from 2017 to 2021, the figures show.



The shift better aligns Ant with the government's strategy for the financial sector while giving it room to grow and innovate, said Zennon Kapron, director at the Shanghai-based fintech consultancy Kapronasia.



"It makes a lot of sense for them to be focusing on the technology side because it plays to their strengths and it also fits within the government's view of the way that the financial industry would develop," he said.



Ant Financial is preparing for long-awaited initial public offerings ΓÇô expected to be in mainland China and Hong Kong in 2019 and expects to soon close a funding round to raise $10 billion that would give the company a valuation of $150 billion.



The sprawling firm has amassed a range of financial licenses and has become a crucial part of China's massive and vulnerable financial system. That has concerned regulators, who want to make sure that the growing size of Ant and other private financial firms do not present systemic problems to the Chinese economy should they fail, the sources said.



Ant Financial was singled out by the People's Bank of China as the only online finance firm for a trial programme to test stricter regulations on financial holding conglomerates, two of the sources said.



"As a non-bank, non-state-owned institution in China, it's not allowed to independently grow too big to manage," said one of the sources.



"Every aspect of the technology we have developed will one by one be opened up to current and potential partners," a spokesman for Ant said.



For Ant and its investors, a successful transition is not guaranteed, as the company still has to figure out how to repurpose its advanced technology capabilities - which range from blockchain and artificial intelligence to security and cloud computing ΓÇô for services tailored for customers like banks, the sources said.