Lujiazui, a financial hub in Pudong, Shanghai, is a hotbed for the financial industry. [Photo/IC]

Internet finance institutions are flocking to Shanghai, China's leading financial center, thanks to the city's preferential policies and abundant financial resources, according to the 2016 Shanghai Internet Finance Development Report released on Oct 20.

The city has lured companies from a wide spectrum of different industries, including third-party payment, peer-to-peer lending (P2P), equity-based crowdfunding, financial portals, online credit investigation and many other sectors. And many of the biggest players in each sector now operate out of Shanghai, such as Alipay in the third-party payment industry and ppdai.com in P2P.

The trade volume of Shanghai's third-party payment industry exceeded 35 trillion yuan ($5.2 trillion) in 2015, with much of this being accounted for by the popularity of mobile payment services, which are widely used in the city's convenience stores, supermarkets, transport hubs and restaurants.

The number of P2P platforms operating in Shanghai increased to 213 in 2015, and their total trade volume nearly quadrupled compared to the previous year, reaching 112.6 billion yuan.

And the city now houses 37 equity-based crowdfunding institutions, more than any other Chinese province and municipality apart from Beijing and Guangdong. The 37 companies' total trade volume exceeded 1.3 billion yuan in 2015.

According to the report, new technologies such as blockchain, virtual reality, biometric identification, voice recognition, big data and artificial intelligence will exert a large influence on the development of Internet finance over the next few years, making the industry more diverse, open and intelligent.