Jonathan Larsen is the new chief innovation officer at Chinese insurance giant Ping An Insurance (Group) Co. of China  says it stems from partly customers, partly technology and partly regulators.

Mr. Larsen was the former global head of retail banking at Citigroup Inc., Mr. Larsen now runs Ping An’s $1 billion Hong Kong investment fund, which is on the hunt for deals in the financial-technology space.

Mr. Larsen spoke with Andrew Dowell of The Wall Street Journal to discuss where fintech is headed and what he thinks is holding it back.

DOWELL:Why are banks still so bad at technological innovation
LARSEN:There’s an enormous amount of opportunity to overhaul banking and financial services generally. So why hasn’t it happened yet?
I can tell you, it isn’t an easy transition. First, clients are quite sticky in their preferences and their behavior, so while it may make sense to us to move everybody on to mobile instantly, there are plenty of people who are quite happy and comfortable with the way they’re doing business. Second, most of these banks have layers and layers of technology. Simply wiping the floor and starting over is an option, but it’s a very challenging, risky and costly option. And third, regulators put brakes on institutions everywhere. Cloud computing is a really good example. There are very few regulators in the world who [truly understand] cloud computing and have clear guidelines about what is and isn’t acceptable.

DOWELL:How would you assess fintech’s prospects?
LARSEN:This technology transformation is going to happen. But it’s going to happen at different paces in different markets and in different areas of the business. Think of the functions that take place within financial-services institutions as being sort of decomposed or atomized, and then re-solved in a new way using technology.
And some of those things can scale to be business models. I think we’ve seen that clearly in mobile payments.

DOWELL:Ping An also has a position in Chinese lender Lufax. Do you want to talk a little about what Ping An’s interest is in fintech?
LARSEN:In the last decade or so, Ping An has made a massive investment in technology. It has 20,000 technology developers and scale platforms that run on blockchain. We’re doing advanced research into voice recognition and facial recognition for all kinds of different applications.

Alongside that, [founder, chairman and CEO] Peter Ma has been able to incubate and create new platforms repeatedly. Lufax is a good example. We’re talking about a $19 billion company as of its last valuation round. GoodDoctor.com is another one—140 million registered users, consulting physicians via chat and image.
There are probably a dozen similar potential platforms that are at various stages of incubation within the group. And then there is a huge amount of effort around artificial intelligence and machine learning in particular.
Our vision is that our business will be a data business.

DOWELL:What types of investments is the $1 billion Global Voyager Fund seeking?
LARSEN:Our focus will be mostly strategic and our sweet spot is investments in the $10 million to $30 million range. That will naturally lead to bigger opportunities for companies that are in their rapid scaling phase. [We want to invest in] people we can learn from. We can access their capabilities through joint-venture agreements, distribution deals, technology deals, licensing. The cooperation can take many forms.