However, the reality is that many enterprises with the name of consumer finance are actually not the “regular army” of the consumer finance industry, that is, they do not have the license of consumer finance, including Ant Financial, JINGdong Finance and other leading Internet finance enterprises. Only 22 companies actually hold consumer finance licences, and most of them have banking backgrounds. In addition to the difficulty and demanding requirements of consumer finance license approval, there are also reasons such as the time-consuming approval process.
However, with the help of science and technology, these enterprises involved in consumer finance are still thriving in the market. Consumer finance has also experienced a development stage from dogfight to cluster, and now it is gradually moving towards the routine. Then, with the help of the power of science and technology, what is the current development stage of consumer finance enterprises and what are their shortcomings in technological innovation?
We can analyze the development of these consumer finance enterprises from the well-known consumer finance mode of e-commerce.
Giants run amok, small and medium players more difficult, the industry is still hidden turbulent
Ant Huabai and JINGdong Baitiao, which have the background of large e-commerce platforms, should be familiar to people who often shop online. Relying on the e-commerce background, they have their own perfect consumption closed-loop scenarios, as well as strong background data analysis foundation and ability.
As Internet consumer financial products, Ant Huabei and JINGdong Baitiao have great development prospects. Data show that ant Financial’s Ant Huabei is expected to lend more than 900 billion yuan in 2017. Since the launch of JINGdong Baitiao in Jingdong Mall in February 2014, jingdong Baitiao has rapidly developed into a popular model of Internet consumer finance, driving jingdong Finance into a channel of rapid development.
At present, with the continuous penetration of the scene, ant Financial, JINGdong Finance and other e-commerce consumer finance players are expanding their service fields, to rent a house, travel, home decoration, car purchase and other more finely differentiated fields.
However, under the bright appearance, these Internet consumer finance enterprises still have shortcomings in their development.
For example, the high popularity of Ant Huabei has spawned a gray industry, namely, huabei cash business. This grey industry implies high risk. First of all, withdrawal needs to charge higher fees. Secondly, due to the particularity of the industry, it becomes a fraud rampant business. No matter what kind of situation occurs, it may cause ants to fall into a bad situation of development.
However, from this aspect, we cannot directly see the fault of Ant Huayuan. Withdrawal is the spontaneous behavior of users, and Ant Huayuan does not support this function. However, from the perspective of its technical restrictions, in a series of cracking operations that are “impossible to guard against”, Ant Huabai should probably start from the improvement of technical ability, and comprehensively prohibit the occurrence of cash withdrawal and other illegal operations. Otherwise, in the current situation of the emergence of cash business, it may cause inaccurate asset calculation and other situations, and ultimately affect the benign development of its own business.
Again like jingdong financial, jingdong ious, new media reported the first consumer finance, from January 2017 to June 2017, jingdong ious of more than 90 days overdue amount increased from 430 million yuan to 600 million yuan, within the time limit is greater than or equal to 90 days of recovery rate only 2.4%, if more than 90 days overdue ious assets as the default, The average default rate was 2.44 percent. This also shows that THE control ability of JINGdong Ious on bad debts is not comprehensive and perfect, and the technical ability of risk control and other aspects needs to be improved.
In fact, in addition to representatives of consumer finance in the department of e-commerce, many small and medium-sized enterprises are also involved in consumer finance modules. These enterprises cover all segments of consumer finance, such as meeting installment in the field of rental housing and tuba rabbit in the field of decoration.
But as a result of giant enveloping and industry particularity, many small and medium-sized enterprises inevitably encounter capital dilemma. Nowadays, under the supervision of policies, campus loans almost go to the end, and these small and medium-sized enterprises in the consumer finance segmentation field, in the face of the strength of the industry giants, life is not so good. There are even some platforms to seek large incremental, more serious long lending phenomenon.
In general, e-commerce consumer finance players represented by Ant Huabei and JINGdong Baitiao bring a lot of consumption convenience to enterprises and users in the process of technology enabling consumer finance. However, at the same time, it should be noted that only Shouting the slogan of technology empowerment is not enough to convince the public. The development of enterprises should not only point to the target of user expansion, but also comprehensively improve risk control technology and enhance the defensive ability of enterprises.
The disease of consumer finance is rooted in technological limitations
As the core of consumer finance, credit investigation and risk control are crucial for enterprises. However, nowadays, although big data, cloud computing and other technologies have inserted soaring wings for consumer finance, greatly improved the operation efficiency of enterprises, but also benefited more and more user groups. In addition, in order to improve the ability of risk identification, face recognition technology and artificial intelligence technology have been introduced into the actual application scenarios. It can be seen that consumer financial enterprises are indeed committed to improving the ability of risk control and credit investigation.
Even so, consumer finance cannot escape the harsh reality of limited technology.
Firstly, the information between platforms is not transparent, and the market data sharing mechanism needs to be improved. Data opacity exists in many Internet industries, as well as in the field of Internet consumer finance. Once this situation persists, it may lead to undesirable phenomena such as users borrowing money repeatedly on multiple platforms at the same time.
Not only is information opaque from platform to platform, but it is also opaque from platform to user. In order to recover funds on time, some platforms start to use improper collection methods, which not only hurts users, but also easily tarnish the platform. For example, around May last year, Baiqian Finance, a consumer installment service, was found to have extended the repayment period of users for no reason. After users refused to repay, they were subjected to improper collection activities such as phone threats.
On the other hand, platforms can’t sustain their business in the long term if they don’t get their money back on time. Over time, the platform may fall into a development cycle when it is difficult to withdraw funds and there is no legitimate strategy to implement. Therefore, violent collection is not feasible and fund recovery is imminent. The root of this problem lies in how to improve the method of fund recovery and enhance the initiative of users to “repay money”.
Second, ai and machine learning are said to help prevent credit fraud and improve risk identification. However, from the current situation of the market, consumer finance credit fraud is still happening, and the application of this technology in the market is not very perfect. In other words, fraud prevention technology is improving, but fraudsters are not far behind, and may even have more high-tech methods. From this point of view, the anti-fraud function of ARTIFICIAL intelligence is even suspected of being exaggerated. Therefore, it is ultimately up to users to improve their awareness of prevention, so as to fundamentally prevent the occurrence of this event which may bring property losses to them.
Finally, due to the imperfect construction of China’s credit investigation system and the rapid sinking of enterprise service objects, when the two phenomena appear at the same time, all kinds of consumer finance platforms will face high bad debt risks under the premise of the rapid expansion of the capital scale of consumer finance.
In general, as the consumer finance industry entered the stage of strict regulation in 2017, the development of enterprises also turned from a free-for-all to a benign competition stage. But these commonplace problems still exist in the market, in the final analysis or the technical level is not in place. In order to realize the long-term development of enterprises, in addition to optimizing their own models, the key is to improve the level of technology-enabled consumer finance.
The consumer financial market needs to be penetrated, but the technical improvement is long
Generally speaking, the driving force of technology on the financial industry has developed to the stage of financial digitization. Until now, data and technology are still the two magic weapons supporting the advance of consumer finance. Behind these two magic weapons are consumer finance enterprises’ aspirations to improve operational efficiency, reduce costs and increase revenues.
Although the consumer finance scene is being refined and enterprises are seeking differentiated development direction, the current situation faced by these consumer finance enterprises and the bad experience brought by this situation to users are far more than these. Problems such as the interest rate and the amount of loans still exist, and the leakage of user information has emerged one after another.
According to the 2017 Internet consumer finance report of Jucomplain.com, the number of effective complaints filed by loanquick, which provides microcredit services, reached 1,191 in 2017, with a large number of complaints concentrated on the issue of personal information disclosure of users. In addition, yicredit and other similar platforms have also received a number of such complaints, and the personal information of borrowers has been greatly threatened.
Therefore, even though the technology enabling finance advocated by these enterprises can bring great benefits to consumers, as long as the main contradiction is not solved, consumer finance is still difficult to get rid of the reality of moving forward.
If consumer finance enterprises want to seek greater development, in addition to developing the long tail users and mining potential users, how to serve users well has become an urgent task at present. It can be seen from the previous exploration experience that the premise for consumer finance industry to enter benign competition is reasonable business model, and the second is to truly consider users and bring certain value to the society.
Under the general trend of consumption upgrading, the consumer finance market is still promising in the next few years. It is expected that the demand boom will continue this year, as there are still broad segments to be explored. In addition to some rigid life needs, users also need the support of consumer finance in some entertainment items, such as watching videos, indicating that the industry has a more segmented scene that can be penetrated. But after its brutal growth, compliance is an urgent requirement for the industry. Another important point is that the deleveraging of consumer finance has become a trend, and the fast money industry is also facing the urgent task of deleveraging.
One will be exhausted, behind the rise of many consumer financial enterprises, is the accumulation of experience of many similar enterprises to explore failure. Nowadays, it is an urgent task for many consumer finance enterprises to strengthen internal risk management and establish a perfect personal credit investigation system. The way forward for enterprises, in addition to strong risk control ability, is more important to have a global control of the market, in order to win a further future. However, in the final analysis, poor technology is still a big problem on the road ahead of enterprises. It is said that the future of consumer finance is worth looking forward to, but the improvement of technology is also a long way.
Article/Liu Kuang public account, ID: Liukuang110