Consumer credit is experiencing explosive growth.

According to the latest "2017 Consumer Finance Insight Report" released by iResearch, in just 4 years, the transaction size of Internet consumer finance has soared from 6 billion to 436.71 billion. From 2013 to 2016, the scale of Internet consumer financial transactions achieved an explosive growth of 70 times, with a compound annual growth rate of 317.

The huge market space for consumer credit is attracting various institutions to rush in. Internet e-commerce giants with advantages in scenarios and data, and mutual financial platforms that are limited by new regulatory policies and are transforming into consumer finance are one after another. Flood into this blue ocean.

At the same time, the market opportunities in consumer finance have also attracted the attention of traditional financial institutions. Taking banks as an example, the growth rate of personal mortgage loans in their retail loans has been suppressed, and light-capital, high-efficiency consumer credit has Become one of the directions of transformation.

The Mobile Life App under China Merchants Bank Credit Card is the best example of the transformation of financial institutions in recent years. In August this year, the Palm Life App has been iterated to the sixth version (version 6.0). Since the birth of this financial services platform, its positioning has continued to evolve with the adjustment of business strategies.

From the 1.0 and 2.0 eras, it focused on "preferential services"; the 3.0 era focused on "financial tools"; the 4.0 era transformed into "financial tools and lifestyle e-commerce". The 5.0 version of the mobile life app has broken the barriers in the banking industry. Registration is open to all users.

On the basis of an open user system, Palm Life App 6.0 further opens up consumer financial services, aiming to become the "No. 1 consumer financial app". At this point, the strategic direction of building the Palm Life App into an independent Internet brand has become clearer.

Innovative and changing banking institutions make competition in the consumer finance market more interesting. So we can see that in China’s current consumer finance market, there are three major Internet e-commerce giants, consumer finance companies and commercial banks. Factions occupy three "highlands" in consumer finance, and the "Three Kingdoms" war situation is clearly visible.

So, how do banks with capital and seeking innovative models win in this round of competition?

The "long board" is very long, and the "regular army" has strong risk control capabilities and is developing more steadily

Looking back at the evolution history of consumer finance, the development space of non-bank institutions such as Internet e-commerce giants actually comes from In order to "differentiate competition", they started from the gap in the market and provided services to groups of people that traditional banks did not pay much attention to, and thus grabbed the first pot of gold for development.

However, with the influx of non-bank institutions into the market, the consumer finance market was once chaotic and exposed many worrying problems. At this time, the advantages of banking institutions as regular troops are highlighted - they have rich experience in risk control, have mature credit reporting and approval models, and have outstanding capabilities in risk control and pricing.

In particular, the credit card business of commercial banks has been developed for many years and has formed a relatively complete and mature risk management and control system. It has also been tested by actual business. Compared with Internet companies and non-bank consumer finance, The risk control systems of companies and banks are more robust.

Zhang Dong, general manager of the Credit Card Center of China Merchants Bank, once told the media, "All consumer credit industries do not die because they develop slowly, but often die because risks are not controlled. Slower speed, You can slowly accelerate after accumulating capabilities, but when the risk management capabilities are insufficient, the faster you develop, the faster you will die.”

In addition to the advantages of risk control, existing customer resources and low capital costs. , good brand reputation and other aspects are also the strong points for banks to enter consumer finance, which form the basis for banks to "overtake".

The "shortcomings" are not short, and smart credit helps the user experience continue to evolve

Although they have the advantage of being a regular army, the early development of the consumer finance market by non-bank institutions also makes them It has gained considerable first-mover advantages - user experience and scenario advantages.

In fact, consumer finance business, mainly credit cards and various consumer loans, is one of the bank's retail businesses.

However, banks’ traditional “online application, offline approval” path sacrifices customer experience. Especially in the field of consumer finance that focuses on small amounts and high frequency, cumbersome approval procedures often keep users away.

But from the current point of view, it may be necessary to "separate for three days and look at the shortcomings of bank customer experience." Many banks have jumped out of the traditional path, and full-process online self-service models have begun to appear. Purely online credit loans that can be applied for with one click and disbursed within seconds have become a powerful tool for banks to capture the consumer finance market.

Take the "eZhao Loan" launched by Palm Life App 6.0 as an example. This is a consumer financial product for old users. It can provide a maximum limit of 300,000 and supports borrowing and repaying at any time or in installments. payment. It is worth noting that this is a purely online product.

This product has gained a considerable market share in a short period of time. As of the end of June this year, the transaction scale of the "e-Zhao Loan" product has reached 38.1 billion yuan, with a balance of more than 30 billion yuan.

Experiencing the Palm Life App 6.0, you can find that “e-loan” is only one of its many segmented consumer financial products. In addition, in order to meet the needs of different users in different scenarios, Palm Life App 6.0 also provides various consumer financial products such as e-flash loans, e-installments, and cash installments.

It is worth noting that in order to solve the "pain point" of users having difficulty finding consumer financial products that suit them, Palm Life App 6.0 also launched an intelligent recommendation engine, e-Zhidai. The user only needs to input the amount he needs to borrow and his desired repayment method, and the backend will recommend a product suitable for him based on the customer's natural attributes and historical transaction data.

Obviously, in order to win more users, banks have realized the importance of grasping user needs and enhancing user experience. After all, no one dares to miss the opportunity of mobile Internet.

Integrating financial technology into scenarios to create intergenerational differences in competitiveness

In order to make up for the shortcomings in the consumer finance field, more and more banks have begun to invest in Fintech, trying to Promote consumer finance through "Financial Technology Scenario Application".

On the one hand, "alliances" between giants have become the norm. Within half a year, BATJ has successively launched cooperation with China Construction Industry and Peasants. The consumer finance business is the focus of its cooperation, and the focus of the integration between the two parties is in the field of FinTech. .

However, due to the short time of cooperation between the two parties, it has not yet been shown what kind of sparks the Internet giants and banks can collide in the FinTech field. How to change the traditional model in which the Internet is the channel and banks are the capital suppliers is still a difficult problem.

In addition to the "alliance" of giants, banks are also starting new attempts. Liu Jianjun, Vice President of China Merchants Bank, sent a positive signal in terms of financial technology and consumer finance, that is, "financial technology is the core driving force for China Merchants Bank's transformation in the second half."

Perhaps, in the future, the mission carried by the mobile platform of Palm Life App will be what Liu Jianjun said - "to realize the scene-based integration of financial technology, meet the general consumption upgrade needs of customers, and obtain retail finance." Generational differences in business competitiveness.”

The Palm Life App is an important platform for China Merchants Bank’s credit cards to lay out scenarios on the mobile terminal. The discounts are no less powerful than those on the Internet platform such as meal tickets and movie tickets, real-time redemption of points, one-click booking of air tickets and hotels, and other services. It has successfully connected more online and offline scenarios, thereby achieving high user stickiness and high monetization.

Taking outbound consumption services as an example, CMB’s credit card scenario services can completely run through the three scenarios before, during and after overseas travel. Services such as booking airport and wine services, applying for visas, overseas shopping, and consumption installments can all be completed on the Palm Life App.

In addition to building its own platform, CMB Credit Card is also seizing customer acquisition scenarios through cooperation with Internet companies. Since this year, China Merchants Bank Credit Card has launched a variety of card products such as Honor of Kings co-branded card, NetEase Cloud Music co-branded card, and Mobike co-branded card, embedding them into more young people’s favorite leisure, entertainment, travel and other scenarios, allowing them to transform into own users.

In general, the traditional financial industry is actively extending financial services to daily life consumption, seizing users' high-frequency usage scenarios, and developing and operating scenarios around the needs of users. Following this logic, banks have made a "reverse breakthrough" that is different from Internet giants - extending from payment platforms to scene services.

Brett King predicted in the business bestseller "BANK 3.0" that "banks will transform the concept of a place into ubiquitous services." If banks want to truly stand on the forefront of consumer finance, they will be tested. Perhaps it is the ability to provide "ubiquitous services".