Private banks have been mushrooming in China as a result of the country's ongoing financial reforms. Five private banks have now obtained operating permits and Webank has already started up. The moves indicate that China 's financial market has started driving growth from the bottom up.

China's banking industry may have seen the first signs of a complete overhaul of its business model. Rather than pumping money into the economy through state-owned banks, the Shanghai Free Trade Zone is rejuvenating the business vibes from the bottom up.

Hua Rui bank obtained an operating permit on Wednesday and aims to lend to small and micro businesses in local residential areas. The private bank has 3 billion yuan in registered assets and is one of the five banks to obtain permits from Shanghai's banking authority.

"We are trying to solve financing difficulties for small and micro businesses, and ensure they can get loans quickly and easily," said Wang Junjin, the group leader of preparation group of Shanghai Hua Rui Bank.

China's first online bank -- Webank -- launched in Shenzhen earlier this month and made headlines around the world. Webank has no brick and mortar branches. It exists only on the Internet and checks clients' identities through online facial recognition. The online bank also serves small and micro companies and aims to expand to rural regions.

"Private banks focus on areas traditional banks failed to cover. This makes up an empty space left by the old financial system," said Chen Feihong, the deputy director of Shenzhen Banking Regulatory commission.

And all of this is only the beginning of a revolutionary change in China's banking industry. Alibaba has just released its credit checking platform Zhima Credit, under Alipay.

The platform uses big data analysis to track users' credit records online. The records will show if you've paid your bills on time and if you've sold counterfeit products.

The measure is expected to bring some order to the burgeoning online financial market, and quiet Alibaba's recent row with the government over the sale of fake goods.