(Yicai Global) Jan. 19 -- Chinese venture capital firm Lightspeed China Partners expects investment in the fintech sector to continue as a general trend going forward as the sector can bring financial returns to multiple industries.

The Shanghai-based firm regards fintech firms' strong capabilities in Big Data operations as a key driver of capital inflows, online media outlet The Paper reported Lightspeed China founding partner Mi Qun as saying at a forum held by peer-to-peer lender PPDai Group Inc. yesterday.

PPDai, which recently went public in New York, as well as Jianpu Technology Inc. Are two examples of firms in the sector that have received early-stage investment from Lightspeed China.

"We're a venture capital firm, so we must be far-sighted and focus on the major trends. Our investment in these two companies was driven by our view that Big Data is an important direction," Mi said.

"Data is at the core of fintech, and effective risk control is a crucial element. For example, the challenge facing peer-to-peer lending businesses is that they can't predict if a borrower will apply for more loans on another platform after taking out a loan with them, a phenomenon known as refinancing. They need to gain insight using Big Data technology and algorithms. Most of the time this is something that can be achieved through startups, rather than major platforms," he added.

With Big Data, they might be able to use artificial intelligence to guarantee effective risk control and anti-fraud operations, he noted.

After PPDai and Jianpu Technology listed, fintech can help businesses monetize their assets. "Companies from various industries will foray into the fintech market in two to three years," Mu predicted.

China will likely outpace the US in terms of businesses that combine geographic positioning data with finance, he noted. "The challenge is to develop new products based on financial Big Data, while continuously improving positioning technologies and ensuring effective privacy protection."

Light Speed is in investment talks with a startup that has already made inroads into this challenge.

The VC firm invested USD50 million in PPDai in 2014 despite its limited scale and slow business growth at the time. In March 2012, it led round-A funding in Jianpu Technology, while the founder of the target company was still drafting a business plan. Light Speed was also involved in its round-B and round-C financing deals in 2013 and 2014, respectively.

Both P2P companies successfully listed on the New York Stock Exchange last November.

PPDai also plans to pump CNY1 billion over the next three years into its intelligence finance institute project, a newly-established facility encompassing AI, blockchain, Finance Cloud and Big Data research centers, it confirmed at the forum.