Online Merchant Bank

People's Daily Online - International Finance News

70 years of hard work and turbulent times; 70 years of hard work and pursuit of dreams.

Looking back on 70 years of development, China's banking industry has gradually developed from a single banking system to a diversified and multi-level banking system. Industry competition has become increasingly fierce and market efficiency has continued to improve, providing opportunities for the rapid development of China's economy. provided strong support.

In this process, private banks have been given different expectations. Their development is an important measure to deepen financial reform, stimulate the vitality of the financial market, and optimize the financial institution system. It is an important breakthrough to strengthen financial services for small and medium-sized enterprises, rural areas and farmers, and communities.

This private bank is an online merchant bank. Since its establishment, it has decided to do only one thing: serve small and micro enterprises well and solve their pain points and problems.

In order to strengthen the financial supply-side reform, "developing private banks and community banks" and "increasing the proportion of direct financing, especially equity financing" were included in the 2019 Government Work Report. Private banks are facing a new round of development opportunities.

1 Be grateful for the "good times"

Unlike the impression that all banking institutions like to gather in the financial city, Zhejiang E-commerce Bank is headquartered in Hangzhou, next to Zhejiang University Technology garden.

Young and energetic, MYBank, which has just turned 4 years old, has become the largest small loan institution in China. In June this year, MYbank handed over its fourth-anniversary report card: the number of small and micro enterprises it served increased tenfold in three years, reaching 17 million. That number rose to 20 million in October. How does this bank do it?

Judging from his resume, Jin Xiaolong has rich experience in banking and small business services. Public information shows that he served as president of the Small Business Finance Division/Internet Finance Division of Ping An Bank, general manager of the cash management department and general manager of the cash management department of Shenzhen Development Bank. In March 2017, he joined E-Commerce Bank as Vice President. In March this year, Jin Xiaolong, who understands both finance and technology, was highly expected to be promoted to president of MYbank.

“MyBank is very lucky. It has caught up with a good era.” Looking back on the development process in the past four years, Jin Xiaolong said with emotion, “MyBank has developed very rapidly because in this era, people are innovating. Enthusiasm for entrepreneurship is unprecedentedly high, and there is huge space for microeconomic development. Moreover, the financial needs of small and micro enterprises and self-employed individuals are very strong, which gives us a very rich 'soil' for development."

Jin Xiaolong said frankly, "In an era without the Internet, it was unimaginable to serve such a small and micro customer group."

Willing to be a "fool's bank"

With the backing of Ant Financial and Alibaba, the Internet Commercial banks are born with strong Internet genes. The original "310" is its proud full-process online loan model: applying for a loan in 3 minutes, disbursing in 1 second, with zero manual intervention in the entire process.

MyBank’s loan model has also been recognized internationally. On October 8, the "Global SME Forum" under the World Bank Group and the G20 announced the 2019 "Global SME Banking Awards". China's MYbank stood out among more than 140 banks around the world.

The World Bank Group and the G20 believe that online merchant banks have redefined lending through big data technology and mobile Internet. With the help of Internet technology, MYbank has completed services to 20 million users without setting up branches. Based on the intelligent identification of more than 100,000 risk indicators, its non-performing rate is only 1.5, which is significantly lower than the industry average.

The main reason is that MYbank’s annual net profit is almost at the bottom, and the money it makes in a year is not as much as what big banks make in a day. The annual report shows that in 2018, MYbank’s net profit was only 670 million yuan.

Jin Xiaolong did not agree with such a title. On the contrary, he said, "Our hearts are actually quite glorious and proud."

In Jin Xiaolong's view, roadside stalls are often the source of food and clothing for a family. Helping this roadside stall is equivalent to helping thousands of families.

In any country, regardless of the level of economic development

Public data shows that there are currently as many as 56 million small and micro enterprises in my country, and only 11.9% of small and medium-sized enterprises can obtain bank loans. About two-thirds of small and micro enterprises Unable to survive the "death period" of the first three years. Among them, the important reasons are difficult financing, high costs, and difficulty in loan credit. If calculated as a family of three, 56 million small and micro enterprises are related to the livelihood of nearly 150 million people.

3 Inclusive finance requires “aggregation”

The mission of MYbank disclosed on the official website is: inclusive finance.

“Our mission will not change, and our focus on serving small and micro enterprises will not waver, but we will practice it with a more open attitude.” Jin Xiaolong explained, “For example, large companies It is a big tree, small and micro enterprises are grass, and money is water. Big trees can enjoy point-to-point watering services, but small grass cannot. However, this also requires the efforts of all of us.”

In recent years, the Party Central Committee and the State Council have issued a series of policies to promote the development of inclusive finance. Inclusive finance involves small and micro enterprises, "mass entrepreneurship and innovation", poverty alleviation, agriculture and other fields. It has a wide coverage and is related to the quality and efficiency of the national economy, employment and the improvement of people's livelihood.

With the efforts of all parties, China’s inclusive finance has also made great progress. The statistical report on loan investment by financial institutions released by the central bank shows that as of the end of 2018, the balance of RMB loans in inclusive finance was 13.39 trillion yuan, a year-on-year increase of 13.8%, and the growth rate was 5.3 percentage points higher than the end of the previous year. The annual increase was 1.62 trillion yuan, an increase of 695.8 billion yuan year-on-year.

However, according to industry insiders, there are still some difficulties and pain points in the process of promoting inclusive finance. For example, if a financial institution wants to carry out inclusive credit, many problems will often arise, such as weak customer acquisition channels, unsatisfactory data risk control effects, limited funds, etc. And it is also easy to encounter sustainability bottlenecks.

“Not long ago, MYbank also cooperated with the Agricultural Development Bank of China, one of the policy banks, and the other party launched mobile phone loan business for the first time. In our cooperation, Agricultural Development Bank of China introduced this entire set of Internet We have independently completed online loan scoring models, online loan intelligent approval, online loan and other new credit processes,” Jin Xiaolong said, “This will also be the direction of our future efforts to export and share technology, and the Agricultural Development Bank will use its own. Financial advantages and low interest rates combine these technologies to serve small and micro enterprises. In the end, small and micro enterprises can enjoy convenient and cheap loan services, saving costs. ”

Last year. In June, MYBank announced the launch of the "Fanxing Plan", opening up all capabilities and technologies to the industry, and sharing the "310" model with financial institutions. It aims to cooperate with 1,000 financial institutions of various types in the next three years,* **Provide financial services to 30 million small and micro operators.

As for how small and medium-sized banks should develop inclusive financial services, Jin Xiaolong believes that each bank has its own characteristics, and there is currently no fixed model and fixed experience in serving small, medium and micro enterprises. "This cannot be generalized. Each small and medium-sized bank has certain differences in its location, shareholder background, target customer groups and ability accumulation. How to develop inclusive finance needs to formulate its own strategy based on its own environment and characteristics. , but the use of technology is definitely the most important.”

The development history of the banking industry

1949 to 1956

The banking industry promoted the recovery of the national economy and basically completed the socialist transformation.

●In September 1949, the "Organic Law of the Central People's Government" clearly included the People's Bank of China as a unit directly under the Government Affairs Council, establishing its legal status as a national bank.

●In 1956, public-private joint venture banks were integrated into the People's Bank of China system, forming a "unified" banking system.

1956 to 1965

The banking industry promoted the comprehensive construction of socialism.

●During the "Second Five-Year Plan" period from 1958 to 1962, we experienced the "Great Leap Forward" and three years of severe difficulties. The bank's business systems and principles were destroyed, leading to out-of-control credit and excessive cash issuance. many.

●From 1963 to 1965, the central government decided to implement the policy of “adjustment, consolidation, enrichment, and improvement” to comprehensively rectify the national economy.

1966 to 1976

The banking industry was hit hard by the "Cultural Revolution".

●In the 10th year of the "Cultural Revolution", the banking system was abolished, business activities could not be carried out normally, the role of banks was weakened, the currency was criticized, commercial financial institutions were abolished, and the People's Bank of China was merged into the Ministry of Finance .

1976 to 1978

Ushering in a great turning point in history, the banking system began to recover.

●The banking industry shall rectify regulations and various financial work, and conscientiously implement the credit plan approved by the state.

●In December 1977, the State Council held a national banking work conference and decided to restore the independent organizational system of banks.

1978 to 1993

The stage of transformation to professionalism.

●On September 17, 1983, the State Council promulgated the "Decision on the Special Exercise of Central Bank Functions by the People's Bank of China." At this point, my country's central bank system began to be established, and a national specialized banking system composed of industry, agriculture, China, and construction began to take shape.

●Joint-stock banks such as China Merchants, Industrial Bank, Guangfa, China Everbright, Huaxia and Shanghai Pudong Development Bank have been established one after another, and foreign-funded banks have expanded from special economic zones to coastal areas.

1994 to 2003

The transition stage to commercialization.

●Establish a strong central bank macro-control system, establish the China Banking Regulatory Commission, and strengthen financial supervision.

●Form a financial organization system with state-owned banks as the main body and policy financial institutions and diversified financial institutions coexisting.

●Increase the proportion of commercial institutions and establish a unified and open financial market system with orderly competition and strict management.

●The "People's Bank of China Law", "Commercial Bank Law" and other laws have been promulgated to provide legal protection for commercial banks to operate independently, bear their own risks, and be responsible for their own profits and losses.

2004 to 2016

The stage of transition to marketization.

In 2004, the State Council launched the joint-stock reform of state-owned banks and promoted the establishment of a modern financial enterprise system.

●Measures include state capital injection and financial restructuring to completely digest historical baggage.

●Carry out joint-stock reform of state-owned banks in accordance with the "Company Law" and "Commercial Bank Law".

●Introduce domestic and foreign qualified institutional investors, realize "introduction of intelligence" and "introduction of control" through investment introduction, and improve corporate governance and internal control management.

●Issuance and listing in domestic and overseas capital markets and subject to market supervision.

Since 2017

Entering a new era of high-quality development.

●Entering a new era, economic growth has shifted from high-speed growth to high-quality development, requiring the financial industry to enhance its ability to serve the real economy, increase the proportion of direct financing, improve the regulatory system, and maintain the bottom line of no systemic financial risks. .

●After 2018, in terms of building a modern financial system, China has launched a series of new reform and opening up measures, such as standardizing asset management business mechanisms, implementing all-round and high-level opening up of the banking industry, and deepening financial supply. side structural reforms, etc. Related Q&A: What kind of bank does Zhejiang Online Commerce Bank belong to? Zhejiang Online Commerce Bank Co., Ltd. is a private bank. The bank has no physical branches and all its business is handled through the Internet, so it can also be called an Internet bank. MYBank is positioned to provide financial services to online merchants, small and micro enterprises, mass consumers, small and medium-sized financial institutions, rural operators and farmers. 1. Introduction to Zhejiang MYbank: Based on the financial cloud computing platform, MYbank has the ability to process highly concurrent financial transactions, massive big data and elastic expansion, taking advantage of the Internet and data technology.

As a bank focused on providing financial services to more small and micro enterprises and individual operators, MYBank’s mission and vision are “meticulous”. In recent years, the development of science and technology has significantly increased the availability of small and micro loans in China. More than 30 million small and micro operators have used contactless loans from MYbank. Their average loan per household does not exceed 40,000, and 70 have never obtained operating loans from banks in the past. . 2. Introduction to private banks In the next five years, "building a Chinese-style open bank" is the core strategy of MYbank. Driven by technology, it will further open up to the supply chain, open to rural areas, and open to financial institutions, while adhering to small profits and inclusive benefits. , MYbank hopes to provide new ideas for the development of global open banking through practice. The current definition of private banks in academic circles can be roughly divided into three types: property rights structure theory, asset structure theory and governance structure theory. The property rights structure theory believes that private banks are controlled by private capital; the asset structure theory believes that private banks are banks that mainly provide financial support and services to private enterprises; the governance structure theory believes that all banks that adopt market-oriented operations are private banks. These three definitions all list the characteristics of private banks from one aspect, but fail to form a comprehensive understanding of the essential characteristics of private banks. The capital of private banks mainly comes from the private sector, and they have a stronger pursuit of profit maximization. Without a sound regulatory mechanism for effective supervision, private banks will often fail due to risk issues. A very important motivation for private enterprises to set up banks is to build a funding platform for enterprises and provide convenience for enterprise financing. Once related enterprises have problems and loans cannot be repaid, private banks will face huge risks.