Home Technology Internet finance (service model based on Internet technology to carry out financial business)

Internet finance (service model based on Internet technology to carry out financial business)



Definition

Internet Finance (ITFIN) is an organic combination of Internet technology and financial functions, and a functional financial format and services formed on an open Internet platform based on big data and cloud computing System, including financial market system, financial service system, financial organization system, financial product system and Internet financial supervision system based on network platform, and has inclusive finance, platform finance, information finance and fragmented finance which are different from traditional finance Financial model.

Introduction

Internet finance is a new type of traditional financial institutions and Internet companies (hereinafter collectively referred to as practitioners) using Internet technology and information and communication technology to achieve financial communication, payment, investment and information intermediary services Financial business model. The deep integration of the Internet and finance is the general trend, which will have a more profound impact on financial products, businesses, organizations, and services. Internet finance has played a positive role in promoting the development of small and micro enterprises and expanding employment, which is irreplaceable by existing financial institutions, opening the door for mass entrepreneurship and innovation. Promoting the healthy development of Internet finance is conducive to improving the quality and efficiency of financial services, deepening financial reforms, promoting financial innovation and development, expanding the opening of the financial industry to the outside world, and building a multi-level financial system. As a new thing, Internet finance needs not only market-driven, encouraging innovation, but also policy assistance to promote development.

Development History

The development history of Internet finance in China is much shorter than that of developed economies such as the United States and Europe. Up to now, China's Internet finance can be roughly divided into three stages of development: the first stage is the Internetization stage of the traditional financial industry from 1990s to 2005; the second stage is the vigorous development of third-party payment around 2005-2012 Stage; and the third stage is the development stage of the Internet's substantial financial business since 2012. In the development of Internet finance, domestic Internet finance has presented a variety of business models and operating mechanisms.

Current landscape

Overall layout

The current Internet + financial landscape consists of traditional financial institutions and non-financial institutions. Traditional financial institutions mainly refer to traditional financial business Internet innovation, e-commerce innovation, APP software, etc.; non-financial institutions mainly refer to e-commerce companies that use Internet technology for financial operations, (P2P) online lending platforms, and crowdfunding Mode network investment platform, mobile wealth management APP (money treasure class), and third-party payment platform.

Current situation in China

The reform of China's financial industry is a major event of global attention, especially the marketization of interest rates, exchange rate marketization and the relaxation of financial controls. And every important system change in major economies in the world is often accompanied by major financial innovations. China's financial reform coincides with the rise of the Internet finance trend. Driven by the traditional financial sector and Internet finance, China's financial efficiency, transaction structure, and even the overall financial structure will undergo profound changes.

According to the analysis of the "Foresight and Investment Strategic Planning Analysis Report of China's Internet Finance Industry", the development of Internet finance in China is mainly caused by regulatory arbitrage. On the one hand, Internet finance companies do not have capital requirements, nor do they need to accept the supervision of the central bank. This is the essential reason; from a technical point of view, although Internet finance has its own advantages, it must consider compliance and risk management (risk control). Problem.

It is not difficult to see from the government’s continuous financial, fiscal and tax reform policies that benefiting and supporting the development of small, medium and micro enterprises has become the main theme. Small, medium and micro enterprises, which account for more than 98% of the total number of Chinese enterprises, are important to China’s economic development. Sexuality can be seen. From the perspective of the light-application, fragmented, and timely financial management attributes of Internet finance, compared with traditional financial institutions and channels, it is more likely to be favored by small, medium and micro enterprises, and it is more in line with their development models and rigid needs.

Currently, in the field of POS wealth creation and wealth management, the needs of a large number of small, medium and micro enterprises that have not been taken seriously in the past are being deeply focused by third-party payment institutions that have a large amount of data information and data analysis and processing capabilities. With the launch of mobile payment products, this more portable, smarter and more targeted payment experience will surely benefit small, medium and micro businesses. Industry experts believe that payment innovation companies will completely bring financial payments to the "basic level", which also indicates that small, medium and micro enterprises will become the biggest winners in the development of Internet finance. This will also have important and far-reaching significance for the sustainable, healthy and stable development of China's economy. .

Responsibilities

The Central Bank and other ten ministries and commissions jointly issued the "Guiding Opinions on Promoting the Healthy Development of Internet Finance", which fully affirmed the development of Internet finance from the regulatory level and formulated a Clear boundaries and identity. As a theoretical + practical professional in the field of Internet finance, JB Finance President Luo Mingxiong has witnessed the emergence of Internet finance and believes that the Internet finance industry has passed the early stage of extensive development and is on the path of healthy development under the legal framework.

Development model

Crowdfunding

Crowdfunding basically means to raise funds for the masses or the masses, which refers to the mode of raising project funds from netizens in the form of group purchase pre-purchase . The original intention of crowdfunding is to use the characteristics of the Internet and SNS communication to allow entrepreneurial companies, artists or individuals to show their ideas and projects to the public, gain everyone's attention and support, and then obtain the necessary financial assistance. The operating mode of the crowdfunding platform is similar. Individuals or teams in need of funds hand over the project planning to the crowdfunding platform. After relevant review, they can create their own pages on the platform's website to introduce the project to the public.

P2P online lending

P2P (Peer-to-Peerlending), that is, peer-to-peer credit. P2P online lending refers to the matching of fund borrowing and lending through a third-party Internet platform. People who need to borrow can find people who have the ability to lend and are willing to lend based on certain conditions through the website platform, and help lenders by working with other lenders Sharing a loan amount to diversify the risk also helps the borrower choose attractive interest rate conditions from the fully compared information.

Two operating modes, the first is a pure online mode, which is characterized by the fact that fund lending activities are conducted online, without combining offline audits. Generally, the measures taken by these companies to review the qualifications of borrowers include video authentication, checking bank statements, and identity authentication. The second is a combination of online and offline models. After the borrower submits the loan application online, the platform will review the borrower's creditworthiness, repayment ability, etc. through a household survey through the agent in the city where it is located.

Third-Party Payment

Third-PartyPayment in a narrow sense refers to non-bank institutions with certain strength and reputation protection, using communication, computer and information security technologies to adopt An electronic payment mode that establishes a connection between the user and the bank's payment and settlement system by contracting with major banks.

According to the definition of non-financial institution payment services given by the Central Bank in the "Administrative Measures for Non-financial Institutions Payment Services" in 2010, in a broad sense, third-party payment refers to non-financial institutions acting as payers and payers Online payment, prepaid card, bank card acquiring and other payment services determined by the People’s Bank of China provided by payment intermediaries. Third-party payment is not only limited to the initial Internet payment, but has become a comprehensive payment tool with comprehensive online and offline coverage and richer application scenarios.

Digital currency

Excluding the booming third-party payment, P2P loan model, small loan model, crowdfunding financing, Yu'ebao model and other forms, the Internet currency represented by Bitcoin Also began to show his fangs.

The outbreak of Internet currency represented by digital currencies such as Bitcoin is, in a sense, more disruptive than any other form of Internet finance. On August 19, 2013, the German government officially recognized Bitcoin as a legal "currency" status. Bitcoin can be used for tax payment and other legal purposes. Germany has also become the first country in the world to recognize Bitcoin. This means that Bitcoin has gradually begun to "whitewash", from the plaything of geeks to the public's attention. Perhaps it can give birth to a real internet financial empire.

Bitcoin's speculation is fierce, and it also plummets. In any case, this Internet gold rush feast that seemed to be far away from us has slowly entered our sight. It has shown people that the ultimate form of Internet finance is Internet currency. All Internet finance only poses a challenge to the existing commercial banks and securities companies, and the future development of the Internet currency is a challenge to the central bank. Maybe Bitcoin will overturn traditional finance and grow into the first global currency, maybe it will eventually collapse, no matter what, it is certain that Bitcoin will leave an eternal legacy to mankind.

Big data finance

Big data finance refers to the collection of massive amounts of unstructured data, and through real-time analysis of it, it can provide Internet financial institutions with comprehensive customer information. Through analysis and Mining customer transaction and consumption information to grasp customer consumption habits, and accurately predict customer behavior, so that financial institutions and financial service platforms can be targeted in marketing and risk control.

Financial service platforms based on big data mainly refer to financial services carried out by e-commerce companies with massive amounts of data. The key to big data is the ability to quickly obtain useful information from large amounts of data, or the ability to quickly monetize and utilize big data assets. Therefore, the information processing of big data is often based on cloud computing.

Information-based financial institution

The so-called information-based financial institution refers to a bank that uses information technology to transform or reconstruct traditional operating procedures to achieve full electronic operation and management. , Securities and insurance financial institutions. Financial informatization is one of the development trends of the financial industry, and informatized financial institutions are the product of financial innovation.

From the perspective of the entire financial industry, the bank’s informatization construction has always been at the leading level in the industry. It not only has an internationally leading financial information technology platform, but also built a self-service bank, telephone banking, mobile banking and online banking. The three-dimensional service system of electronic banking, and the large-scale informatization-data concentration project is the leader in the industry. In addition to innovative financial services based on the Internet, it has also formed a "gateway", "Internet banking, financial product supermarkets, and e-commerce "One for three financial e-commerce innovative service models.

Financial Portal

Internet Financial Portal (ITFIN) refers to a platform that uses the Internet to sell financial products and provide third-party services for the sale of financial products. Its core is the "search price comparison" model, which uses the vertical price comparison method of financial products to place the products of various financial institutions on the platform, and users select suitable financial products through comparison.

The diversified and innovative development of Internet financial portals has formed third-party financial institutions that provide high-end financial investment services and financial products, and insurance portals that provide insurance product consultation, price comparison, and purchase services. This model does not have too many policy risks, because its platform is neither responsible for the actual sales of financial products, nor does it bear any bad risks, and the funds do not pass through the intermediate platform at all.

Main features

Low cost

Under the Internet finance model, both the supply and demand parties of funds can complete information screening, matching, pricing and transactions through the network platform, without tradition Intermediary, no transaction costs, no monopoly profits. On the one hand, financial institutions can avoid the capital investment and operating costs of opening business outlets; on the other hand, consumers can quickly find suitable financial products on an open and transparent platform, which reduces the degree of information asymmetry and saves time and effort.

High efficiency

Internet financial services are mainly processed by computers, with fully standardized operating procedures, customers do not need to wait in line, business processing speed is faster, and user experience is better. For example, Alibaba Microloans relies on the credit database accumulated by e-commerce companies, through data mining and analysis, and introduces risk analysis and credit investigation models. It only takes a few seconds for merchants to apply for a loan to issue a loan, and it can complete 10,000 loans every day, becoming a real "Credit Factory".

Wide coverage

Under the Internet finance model, customers can break through the constraints of time and region and find the financial resources they need on the Internet. Financial services are more direct and the customer base is broader. In addition, Internet finance customers are mainly small and micro enterprises, covering some of the financial service blind spots of the traditional financial industry, which is conducive to improving the efficiency of resource allocation and promoting the development of the real economy.

Fast development

Relying on the development of big data and e-commerce, Internet finance has experienced rapid growth. Take Yu'ebao as an example. Yu'ebao has been online for 18 days and has accumulated more than 2.5 million users and accumulated transferred funds of 6.6 billion yuan. According to reports, Yu'ebao has become the largest public fund with a scale of 50 billion yuan.

Weak management

First, weak risk control. Internet finance has not yet been connected to the People’s Bank of China’s credit information system, nor does it have a credit information sharing mechanism. It does not have similar banks’ risk control, compliance, and collection mechanisms, and is prone to various risk issues. There are already Zhongdai.com and Wangying. Tianxia and other P2P online lending platforms announced bankruptcy or ceased their services. The second is weak supervision. Internet finance is in its infancy in China, without supervision and legal constraints, lack of entry barriers and industry norms, and the entire industry faces many policy and legal risks.

The risk is high

First, the credit risk is high. At this stage, China's credit system is not yet complete, and relevant laws on Internet finance have yet to be matched. Internet finance has a relatively low cost of default, which can easily induce risks such as malicious loan fraud and withdrawal of funds. In particular, P2P online lending platforms have become a hotbed for criminals to engage in illegal fund-raising and fraud due to low entry barriers and lack of supervision. Since last year, P2P online lending platforms such as Taojindai, Youyi.com, and Antai Zhuoyue have successively exposed "off-the-road" incidents.

Second, network security risks are high. China's Internet security issues are prominent, and the issue of cyber financial crime cannot be ignored. In the event of a hacker attack, the normal operation of Internet finance will be affected, endangering the safety of consumers' funds and personal information.

Information processing

One isSocial networkGenerate and disseminate information, especially to individuals The information that institutions are not obligated to disclose has increased people's "integrity" level, greatly reduced the cost of financial transactions, and played a fundamental role in financial transactions.

The information disclosure function of social networks can be expressed as: individuals and institutions have a large number of stakeholders in society. These stakeholders all have some information, such as property status, business conditions, consumption habits, reputation behavior, etc. The information of individual stakeholders may be limited, but if these stakeholders all publish their own information on social networks, they can get complete information on their credit qualifications and profit prospects together. For example, “Taobao” is similar to a social network. The massive amount of information formed by transactions between merchants, especially information about the exchange of goods and funds, shows the merchant’s credit qualifications. If Taobao establishes a small loan company, use this information to give some The effect of merchants issuing small loans will be very good.

The second isSearch engineThe organization, sorting and retrieval of information can alleviate the problem of information overload and meet the information needs in a targeted manner . The integration of search engines and social networks is a trend. The essence is to use the relational data contained in social networks to filter information, which can improve the degree of "integrity". For example, the "crawler" algorithm for crawling web pages and the link analysis method for page ranking (represented by Google's PageRank algorithm) both use the link relationship between web pages and belong to relational data.

Three YesCloud ComputingEnsure the high-speed processing capability of massive information. Under the protection of cloud computing, the information of the fund supply and demand parties is revealed and disseminated through social networks, organized and standardized by search engines, and finally formed a time-continuous and dynamic information sequence. The risk pricing or dynamic default probability of any fund demander (institution) can be given, and the cost is extremely low. In this way, the information base (sufficient condition) of financial transactions is satisfied. A spot trading market for computing power has appeared in February 2011, and a futures market is expected to also appear. The financial industry is a big user of computing power, and cloud computing will have a significant impact on the financial industry.

Regulatory policies

The People’s Bank of China is working with banking, securities and insurance regulatory agencies to try to implement relevant regulatory measures to prevent consumer information from being stolen or misused, and to ensure The risks of Internet investment products are fully disclosed, and illegal financing activities are prohibited. Management personnel have repeatedly expressed their views on Internet financial supervision.

On October 10, 2018, in order to regulate the anti-money laundering and anti-terrorist financing work of Internet financial institutions, and to effectively prevent money laundering and terrorist financing activities, the People’s Bank of China, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission The Management Committee formulated the "Management Measures for Internet Financial Institutions' Anti-Money Laundering and Anti-terrorist Financing (Trial)" (hereinafter referred to as the "Management Measures") and announced today. Details Management Measures for Anti-money Laundering and Anti-terrorist Financing by Internet Financial Institutions (Trial)

External Evaluation

Li Dongrong is attending the Second Session of the 12th National Committee of the Chinese People's Political Consultative Conference The above statement was made to the Shanghai Zhengbao reporter at the opening meeting. As a new thing, Internet finance must play its positive role, regulate its development, and express that the central bank supports all new things. (Li Dongrong, deputy governor of the Central Bank)

Whether it is online or offline, as long as it is financial activity, it should be included in the scope of supervision in accordance with existing financial regulations, rather than "Let it go, let it go if something happens." "Attitude. Li Daokui, a former member of the Monetary Policy Committee of the People's Bank of China, also stressed to a reporter from the Shanghai Securities News that Internet finance must be included in supervision and believes that interim regulations on Internet finance should be promulgated. (Yang Kaisheng, member of the National Committee of the Chinese People's Political Consultative Conference and former president of Industrial and Commercial Bank of China)

Currently, there are many hidden risks in Internet finance and the unclear legal status, and it is outside the financial supervision system, which has a major impact on the security of the financial system and social stability , It is urgent to strengthen Internet financial supervision. (Wang Jingwu)

Typical Cases

Financing

Online banking launched by the four major commercial banks, Tencent launched WeChat and PICC P&C mobile payment, Taobao Yu'e Bao, developed in conjunction with Tianhong Fund, also includes a number of third-party payment platforms such as Easy Pay, Baipay, and Kuaiqian.

In 2013, the global private equity and Internet finance-related fields continued the enthusiasm of the past few years. In May alone, Twitter announced the acquisition of big data startup Lucky Sort; IDG announced two virtual currency-related investments; Microsoft planned to invest 1 billion US dollars to acquire the digital assets of Nook Media.

In July 2014, a domestic P2P company completed Series C financing, and the accumulated financing amount exceeded 600 million yuan in three years. The main investor in the C round of financing is Lanting Investment, a subsidiary of Singapore's sovereign investment company Temasek. In addition, the first two rounds of investors Lightspeed Anzhen China Fund, Sequoia Capital, and Kaipeng Huaying China Fund have all made additional investments.

Microfinance

Microfinance, also known as WeChat Finance, is a new financial model around 2012. That is, with the help of typical social media platforms such as WeChat, to provide users with a relatively small-scale financial behavior environment such as financial management, investment, and loans. Under normal circumstances, it refers to small, medium and micro enterprises, entrepreneurs, individual industrial and commercial households, and small investments. Financial services provided by A few days ago, a third-party platform released the ranking of WeChat financial platforms. Taking the top-ranked "lightning borrowing" as an example, the third quarter financial report of 2015 showed that its lightning borrowing platform had matched transactions in the three months of 7, 8, and 9 respectively. There are 195 million, 228 million, and 267 million, with extremely rapid growth.

As the microfinance information service system continues to grow, the concept of microfinance information service is also expanding. Now its most accurate definition is: it is specifically provided to small and micro enterprises and low-income groups. Small-amount, short-term, sustainable and circular micro-financial products and services activities. "

There are two characteristics of microfinance information services: one is to target small, medium and micro enterprises and poor or low-income groups as specific target customers; Financial products and services for specific target class of customers.

Mobile payment

For the large-scale offline POS acquiring market, more and more third-party payment companies are online The expansion of the acquiring market and offline payments in the future will have an important impact on the overall comprehensive payment market.

Intellectual Property Finance

Intellectual Property is a strategic resource and resource for national development. The core element of international competitiveness, finance is the core of the modern economy. Strengthening intellectual property financial services is an active measure to implement the strategic deployment of the Party Central Committee and the State Council on strengthening the use and protection of intellectual property rights. It is intellectual property work that serves the economic and social innovation development and supports innovation. An important means of building a country-oriented country. Promoting the effective integration of intellectual property rights and financial resources will help broaden the financing channels of small, medium and micro enterprises, improve the environment for innovation and development of market entities, and promote a virtuous cycle of innovation resources; Diversified capital investment mechanism, through the diffusion of technological innovation achievements through value-added professional financial services, and comprehensively promote the transfer and transformation of intellectual property rights; help guide the transfer of financial capital to high-tech industries, promote the transformation and upgrading of traditional industries and the cultivation and development of strategic emerging industries , To improve economic quality and efficiency.

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