Internet finance and credit reference system construction

On August 27, 2013, Mrs. Wang Xiaolei, vice director of the Credit Reference Center of the People’s Bank of China, gave a keynote speech in the 12th installment of “Hongru Forum”.

Wang stated that the essence of finance is the circulating of funds and debit and credit transactions, the core is the credit risk management, and the Internet finance can not be separated from the risk identification, judgment and management. Though there are exciting innovations from the Internet finance, she worried about the challenges from information disclosure and protection of privacy, the macro- risks in laws and policies, and the micro- risks in information management.

Then, Wang carried out detailed introduction for the historical development of China’s credit reference system construction, the credit and loan fields covered by the system, and the collection and usage of information etc.. She believed that the construction of the credit reference system can promote the risk management for commercial banks and improve their efficiency of examining loans. Moreover, such system can play an important role for promoting the development of China’s credit market.

For the relationship between the Internet finance and the credit reference system, Wang thought that both of them mutually support and promote each other. The credit reference system supports the development of the Internet finance through the information sharing among lenders and its deterrent effect, and the Internet finance may also play a perfection role for the credit reference system through the credit and loan information on its own platforms.

After Wang’s speech, Mr. Chen Bin, deputy general manager of China Chengxin Securities Rating Co., Ltd., Mr. Chen Yu, vice president of Hangzhou Dehope Asset Management Co., Ltd., Mr. Wang Wenyang, Chief Risk Control Officer of the website of DianRong, and Mr. Gao Limin, researcher of SIFL Institute, provided commentary.  

Mr. Chen Bin believed that the advantages of the Internet financial service industry lie in the credit investigation pattern of interactive low cost and high accessibility, and this is the core competitiveness that it faces traditional financial industrial transformation and the development of future Internet financial service industry.

Chen Yu put forward that the Internet can be optimized for the financial industry from the following angles: the mass demand and supply of bilateral markets, data recordability, and dispersible risks and circulation. At the same time, he thought that P2P should not hold too much expects for the credit reference system, because the risk capacity depends on the individual operation capacity.

For the question put forward by Gao Limin on “how can the credit reference system play a role for the newly established Shanghai free trade zone,” Wang Xiaolei believed that firstly the credit reference system should follow the principle of equal treatment without discrimination and mutual benefit, and it is a rather feasible way that public platforms will be established in the free trade zone and transparency of information will be carried out.

As an insider of Internet finance, Wang Wenyang paid great attention to the construction of the credit reference system. He hoped that P2P can include small loan companies and even all non-financial or similar financial enterprises can all be brought into the national information base, thus the assessed cost can be lowered and better financial services can be provided.

“Hongru Forum” is a public seminar jointly launched by Liu Hongru Financial Education Foundation and SIFL Institute, and is held regularly once in two weeks. The seminar pays attention to various issues in China’s finance and macro-economy, and devotes itself to building a platform for cross boundary exchanges among excellent scholars, government and market institutions.