Pleasant Internet and Big Big Banks

But in China, where bloated banks are pampered by generous state support, inefficiencies have offered the perfect opportunities for Internet firms such as Alibaba to stage "China-style creative destruction", forcing fusty old institutions to evolve or perish.

"In recent years, Internet finance has marched into the core businesses of traditional banks, bringing us a strong sense of crisis," acknowledged Wang Yingjun, a strategy and development analyst with China Merchants Bank.

Internet finance may look Lilliputian in face of the Gulliver of China's powerful banks, but the real threat is that Internet firms, with their vast data banks on purchase habits and credit records, are better placed in the age of "Big Data".

When you combine that with China's tempered growth and relaxation of the government's grip on interest rates -- a major source of bank revenue -- you can already picture the challenges for big bank to secure the current profits.

Among China's 16 listed banks, the majority reported slower profit growth in the first three quarters. Those profits will shrink further if the dinosaurs are unwilling or unable to evolve, as China uses the free market to shore up growth.

Earlier this month, the central bank allowed interbank trading of deposit certificates, another step towards fully floating interest rates, following scrapping of the floor on lending rates in July.

The key reform decisions last month gave the green light to allowing private capital to set up banks, albeit modest ones. These reforms are a leg up for Internet finance which will lead to a more transparent, efficient and modern financial system, analysts said.

"To rise to the challenge, banks need a more diversified, customer-centered approach. They must restructure and make better use of the Internet to cut costs and improve transparency," said Wang from the Merchants Bank.

Although a worthy competitor to traditional banks, Internet finance, which is still minuscule in comparison, may eventually serve more as an alert for banks not to rest on their laurels and help move towards a more efficient market.

"From a long-term perspective, the Internet and traditional finance are not mutually exclusive. Integration of the two is the way forward," said Professor Dai Xianfeng with Renmin University of China.

As Jack Ma has put it, "we are not here to stop the show, but to build the future together."