First of Three Private Banks Opened in Qianhai
China’s first private online bank WeBank had its soft opening in Qianhai last Sunday, and the bank is one of the three private banks in China that is given approval by the China Banking Regulatory Commission last July. The bank’s office is located in Tianxia International Center building that was open for business only for the purpose of inviting clients. So far users of the banks services are limited to shareholders and employees.
The first challenge for the bank will be the infrastructure construction, with no brick and mortar locations for its customers, the bank will mainly handle clients requests for banking services online through face identification technology, thus making it different from other traditional banking services that required clients to go to the banks. But online business such as these will encounter a policy barrier is based on the current regulations that requires clients to open accounts at the bank’s office.
A professor of economics at the Central University of Finance and Economics said that is its best to follow the trend of online banking and to overcome the policy barrier as long as the customers money can be protected. Credibility construction is also an issue the online finance sector faces. Several insiders say that the establishment of WeBank is indeed a challenge to current regulatory policies with regards to clients credibility.
The bank will be applying big data analysis to distribute loans to clients that re identified through face recognition technology. A representative for the bank said that he bank’s big data system accumulated 40 trillion pieces of information by leveraging on Tencent’s customers base. Such as log in information, payment histories, victual assets, tracking online shopping habits and online social interactions to create credibility reports based on online behaviors.
Compared with client information that are kept by traditional banks, information are collected from social networks is incomplete and it’s a convention that data from social networks only accounts for a small proportion of online financing organizations risk management.