On July 30, the People's Bank of China held a work conference for the second half of 2021. According to the content of the meeting, the key tasks of the People's Bank of China in the second half of the year include promoting the promulgation of the "Credit Information Business Management Measures" (hereinafter referred to as the "Measures").

This shows that after nearly five years of research and drafting, the "Measures" will finally be officially launched.

Previously, the "Interim Measures for the Management of Internet Loans of Commercial Banks" and the "Interim Measures for the Management of Online Small Loan Business" jointly restricted the model of cooperation between Internet platforms and banks to issue joint loans.

Including the subsequent issuance of the "Notice on Further Regulating the Internet Loan Business of Commercial Banks", although it meant that Internet platforms had completely withdrawn from United Lending, the industry at that time believed that at least the "Interim Measures for the Administration of Internet Loans of Commercial Banks" "Confirmed the legality of "loan assistance" - so loan assistance can be done with confidence.

Indeed, since then, the major Internet financial technology platforms have transformed into "pure loan assistance" - loans are issued by licensed financial institutions such as banks and consumer finance companies, and the Internet platform only serves as a guide. flow.

But at the same time, the policy risks of the "loan assistance model" itself have begun to be mentioned frequently, and the industry has begun to worry that even the loan assistance model has great uncertainties.

After all, the so-called "pure loan assistance" and "pure diversion" actually include customer acquisition, operations, risk control, and post-loan operations. It can be said to cover the entire chain of the Internet loan business.

Now, with the implementation of the "Measures", this worry is about to become a reality. The data and models currently involved in the loan assistance business are bound to be greatly affected by the introduction of the Measures.

The current loan assistance model will definitely need to be adjusted, but we also need to realize that if it is really "one size fits all", it may not only affect the Internet financial technology platforms, but also the entire Internet credit business. Will be impacted.

Strict management should not only achieve regulatory goals, but also pay attention to the sustainable development of the industry.

Data issues are the core issue

From a regulatory standpoint, the goal is also very clear, which is to regulate both capital flows and information flows.

Therefore, if the "Interim Measures for the Management of Internet Loans of Commercial Banks" bring Internet loans back into the system of licensed financial institutions, thus realizing the supervision of capital flows, then the "Credit Business Management "Measures" actually means to regulate the flow of information through licensed credit reporting agencies.

In the Internet era, the so-called information flow is actually data flow, and information supervision must be achieved through data management.

In terms of information collection, according to the "Credit Information Industry Management Regulations", credit reporting agencies are not allowed to collect personal religious beliefs, genes, fingerprints, blood types, diseases and medical history information, nor are they allowed to collect personal income and deposits. , securities, commercial insurance, real estate information and tax amount information.

With the development of Internet finance, the credit reporting business has entered the digital era, and it is no longer possible to properly regulate the flow of information simply by relying on these provisions of the "Credit Reporting Industry Management Regulations". This is why the "Credit Reporting Business Management Measures" have been introduced - the rules of the credit reporting business, the boundaries of credit reporting, and the use of credit information all need to be redefined.

According to the "Credit Information Business Management Measures (Draft for Comments)", credit information refers to various types of information that provide services for financial and economic activities and are used to judge the credit status of individuals and enterprises. Including but not limited to: personal and corporate identity, address, transportation, communications, debts, property, payment, consumption, production and operation, performance of legal obligations and other information, as well as analysis and evaluation of personal and corporate credit status based on the aforementioned information. information.

Here, the scope of credit reporting information has been expanded, and as long as it provides services for financial and economic activities, it is a credit reporting behavior that is used to judge the credit status of individuals and enterprises.

Obviously, the loan assistance business of Internet platforms includes credit reporting activities.

However, credit reporting can only be done by licensed credit reporting agencies, not other agencies. Supervision wants to clarify the boundaries between financial institutions, credit reporting agencies, and diversion platforms. This is very obvious in the recent news of "cutting off direct connections."

The People's Bank of China's Credit Bureau requires that when Internet platforms conduct traffic diversion, loan assistance, and joint loan business with financial institutions, they must not provide application information, identity information, basic information, personal portrait scoring information, etc. Financial institutions provide information actively submitted by individuals, information generated within the platform, or information obtained from outside.

This is the so-called "disconnection" between personal information and financial institutions.

The data on the loan assistance platform must first be given to the cooperative credit reporting agency and cannot be given directly to financial institutions. Moreover, the platform also needs to explain the source of the information, who processes the information, and how the information is processed.

According to the "Credit Reporting Business Management Measures (Draft for Comments)", when a credit reporting agency collects credit information, it must verify the information provider's business legality, information source, information quality, information security, and information subject. Authorization, etc. are reviewed to ensure that the credit information collected is legal, accurate and sustainable.

In addition, the Credit Bureau also requires that platform institutions re-revise and improve the personal credit business rectification report, and add a business cooperation flow chart and text of the "platform-credit agency-financial institution" after the rectification Description, and also provide a detailed description of the information collection, processing, processing entities, information flow and capital flow direction of each business link.

In other words, when a platform assists loans, it must not only choose a credit reporting agency to cooperate with, but also must accept the review of the credit reporting agency, explain the data source, data processing, and data processing to ensure that it is provided to The data of the credit reporting agency is legal and compliant.

Credit reporting data can no longer be circulated directly between the Internet platform and banks.

Incentive space should be left for loan assistance

In fact, even if there is no "disconnection", in the loan assistance business, the platform is not willing to give data directly to the bank. If you can give as little as possible, give as little as possible.

Take Tencent WeChat's credit card diversion as an example. A bank cooperates with Tencent to provide credit card diversion. Users see advertisements in the WeChat information flow and fill in simple personal information to submit application requirements. The bank's account manager will contact the applicant, but whether the application can be passed depends on the review of Tencent WeChat. Both parties have to wait for the review results of Tencent WeChat. If it passes, the card can be opened. If it does not pass, the customer will There is nothing the manager can do.

It can be seen that in this diversion, what Tencent WeChat provides to the bank should only be a personal risk score, while other more detailed application data, scenario data, and behavioral data are simply impossible Give it to the bank.

In terms of loan assistance, only the Internet platform can lead the rules of cooperation. Financial institutions either want the data or they don’t want it, or even if they want it, they don’t have the strong processing capabilities.

Therefore, in terms of data, the game between Internet platforms and banks has been ongoing. Now with the requirement to "disconnect direct connections" and the implementation of the "Measures", Internet platforms were previously unwilling to The data given to financial institutions will later be given to credit reporting agencies.

After credit reporting completely returns to credit reporting agencies, the platform will become a provider of credit reporting information. All data used in loan assistance business must be submitted to credit reporting agencies, including loans. Personal information submitted by applicants, information generated within the platform or information obtained from outside.

Banks need to obtain the credit report of the applicant through a credit reporting agency, and then do the approval themselves.

In fact, this reflects an issue that supervision has always emphasized - banks must conduct independent risk control. Under the previous loan assistance model, the traffic was on the platform and the data was on the platform. The platform was equivalent to doing both credit reporting and risk control. Financial institutions either did not have the motivation and ability to carry out independent risk control, or they had no desire to do so. data.

Now through a chain of information flow such as "platform - credit reporting agency - financial institution", banks are "forced" to conduct independent risk control on their own.

But in this case, from the perspective of the platform, traffic and data are originally the biggest advantages. In the loan assistance model under "platform-credit agency-financial institution", loan assistance has to be The data involved are handed over to the credit reporting agencies. One is that existing businesses need to be compliant, and the model for new businesses must be adjusted based on their own circumstances.

For Internet platforms with scenarios, there is a large amount of endogenous information on the platform. Under the existing rules, this information does not need to be submitted as long as it is not used for loan assistance. If it is used for loan assistance, it must be submitted to the credit report. mechanism. If the platform does not want to hand over too much underlying data and models, its motivation to facilitate loans will decrease. Because there are other businesses, the financial technology business sector may be "downgraded" in the long run. In fact, this has already happened.

Then there are some financial technology platforms that mainly rely on obtaining information from the outside. They have been hit much harder than Internet platforms with scenarios.

Some financial technology platforms, after withdrawing from P2P and joint lending, began to transform into "pure loan assistance" - only diverting traffic for financial institutions. But this diversion is not as simple as recommending a customer with loan needs. These financial technology companies have been deeply involved in Internet finance for many years and have deep accumulation in underlying data, algorithms, computing power, and models. The "diversion" for financial institutions actually covers customer acquisition, conversion, risk control, and post-loan operations. manage.

Nowadays, leading financial technology platforms spend hundreds of millions, or even more than one billion, in advertising fees every year to buy traffic from external platforms, then develop their own products and systems, and then cooperate with banks and other platforms. Cooperation with financial institutions. If all data and models for loan assistance are reported to credit bureaus, will these platforms still spend hundreds of millions every year to purchase traffic?

Of course, in addition to the requirements of the "Measures", the platform's enthusiasm for providing loan assistance also depends on profits. However, under the regulatory trend of reducing the overall interest rate to less than 24%, the profit margin left for loan assistance platforms is no longer large.

In the digital age, it is an irreversible trend for banks to acquire customers through Internet platforms. Especially for many small and medium-sized banks that do not have their own traffic, acquiring customers depends on third parties, especially the Internet. platform cooperation. Although banks have always hoped to take more initiative in diversion cooperation with financial technology companies. However, if the space for Internet loan assistance is compressed too much, banks and other financial institutions may not be able to obtain both traffic and data as they wish.

Therefore, it is necessary to set clear boundaries and establish regulations between Internet platforms, credit agencies, and financial institutions, but it is also important to leave room for incentives.