What else can China's Internet finance learn from the United States?

Tencent Technology Wang Pan reported on June 8

One of the hottest industries in China right now is Internet finance.

The manpower, material, and financial resources invested in this protracted battle have far exceeded the previous investment in other Internet wars.

What "weathervane" can the United States on the other side of the ocean bring to this war?

Why is there no Lending Club in China?

While Chinese people are still laughing at the absence of "Internet finance" in the United States, the US P2P company Lending Club (hereinafter referred to as LC) has already gone public.

In addition to the completely different company establishment time, population size, and social and cultural environment, the demands faced by LC and China's P2P platforms are also very different.

In addition, the United States has a very powerful FICO credit scoring system, which contains complete and effective personal credit information.

In the United States, as long as you have an SSN (Social Security Number), your personal credit status from childhood to childhood can be seen at a glance.

In China, because there is no similar credit scoring system, it is impossible to accurately determine the authenticity of the borrower's identity and repayment ability online, and most platforms can only obtain borrowers offline.

Lili.

Zhang Jun, CEO of Paipaidai, told Tencent Technology that Paipaidai released its own risk control system "magic mirror" in March this year.

However, even so, due to the lack of data, credit evaluation will still be a big problem to be solved for a long time in the future for Yili.

Is there really no "Internet finance" in the United States?

When the fierce battle on Internet finance in China was underway, people were surprised to find that the so-called "Internet finance" does not exist in the United States across the ocean.

According to statistics from Tencent, the United States started earlier than China in all areas of Internet finance, and most areas are ahead of China for more than 5 years.

Take the US version of "Yuebao" Paypal Money Market Fund as an example.

In the field of crowdfunding, Kickstarter achieved profitability as early as 2010, and successfully provided a large amount of original funding to well-known startups such as Instagram and WhatsApp.

Nowadays, the reason why the United States does not have companies swarming into the Internet finance field is that its offline financial system has been relatively developed, and various financial services have become mature, and it is more difficult to innovate.

Of course, although China started late in the field of e-commerce and electronic payment than the United States, it has managed to catch up from behind.
Yu'ebao is also entirely possible to do better than Paypal money market funds.
Also in the fields of Internet insurance, crowdfunding, online banking, P2P, etc.
, we also have a tendency to catch up with the United States.
However, it is too early to draw conclusions and judge which is better.

Why did the United States not "run the road"?

In the past two years, several new companies have entered Internet finance every day in China, and most of these companies have chosen the P2P field.
But at the same time, there is another jaw-dropping data that, on average, a P2P platform will run away in less than two days.
People’s reactions have gone from disbelief, questioning, shock, anger, and rights defense at the beginning, to now commonplace and self-confessing bad luck.
However, in the United States, there is no such thing as "running away".

On the one hand, the number of companies engaged in Internet finance in the United States is much smaller than that in China.
In addition, the supervision is very strict.
Companies that can pass the supervision are more qualified, and naturally there are fewer runaways.
In addition, because of the national network of credit, which can be accessed at any time, Americans value their credit.
At the same time, the cost of default is also very high, and the platform dare not run away easily.
Thanks to the good social credit system in the United States, both the borrower and the lender can basically accept the default rate on the platform.
If I lose my investment here, I will lose it.

In China, some platforms have come for fraud, and have been prepared to run away from the beginning.
After running off the road, he even changed his face to launch a new website, continued to deceive, and then ran off.
In addition to the above, some platforms exaggerated the fact that they claimed to be guaranteed at the beginning, and even gave users too much promises in the form of sideballs.
In the end, they couldn't fulfill them and had to run away.

91 Finance co-founder Wu Wenxiong told Tencent Technology that in the United States, because the FICO credit scoring system is available, the P2P platform can clearly determine the credit of the borrower, and then disclose the credit information of the borrower to the borrower.
For example, the company LC, it only acts as an intermediary to collect intermediary fees and does not assume risks.
In China, because there is no strong credit data for reference, the P2P platform has to bear the credit endorsement for the borrower, which means that the platform is responsible for the user's funds.
And once there are unaccountable responsibilities, you can only choose to run away.

Of course, another very important reason is that the supervision system is imperfect and the punishment is not strong enough.
The vast majority of runners can get away with it.
Unlike startups in the travel field who want the government to loosen supervision, mainstream companies in the Internet finance sector in China have all called for stronger supervision, especially in terms of entry barriers.
Mainstream companies have called for not allowing companies without professional capabilities to have qualifications.
If a large number of companies with no business capabilities enter this field, once the economic environment changes, a large number of bankruptcies or runaways are likely to occur.
And this change in the general environment will inevitably affect companies that have real business capabilities, and it is not impossible for the regulatory authorities to stop them regardless of their quality.
This can easily lead to "bad money driving out good money.
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