采访视频连接： Q1. The survey says the traditional banking is to be impacted. But specially, how? Why banks like WeBank are more competitive? Causality is usually not so strict forward. Cause and effect are sometimes being confused. Rather than attributing the changes of the banking system to what WeBank will be doing, I will say that China enters the stage of rapid banking deregulation and among those given the privilege to move China’s reform further, WeBank is one promising example. Its counterpart, a peer-to-peer lending firm called the Lending Club has originated over 6.2 billion USD in loans. And this month, the Lending Club raised almost US$900 million in the largest U.S. tech IPO this year. But the China story is different. Sometimes what works in the States does not work in China or vice versa. When the PRC was established, China imitated the Soviet Union's national strategy to develop heavy industries first. With so limited capital in the early stage of development, funds were allocated to the heavy industries not necessarily to the most qualified or needed in society. I am not making a point about whether this national policy is right or wrong. After all, we managed to finally develop the nuclear bomb. But the consequence is that it was very difficult for small businesses to finance their operations. Even after more than 30 years of reform, the power and desire to regulate got stuck. People with guanxi get the loans. In a sense, the wealthy gets the loans not the poor. How can income polarisation be improved that way? We need to let the ones from the lower social ladder, who don’t have guanxi, to be able to get loans. We need to let our top students to be able to borrow money to study abroad. WeBank is the first to go into business among the five who obtained the private bank license from the China Banking Regulatory Commission this year. Each of which has a specialty. The greatest assets of WeBank are the huge customer base and the dominating position of Tencent on mobile device portals. Unlike traditional banks, there are no physical branches of WeBank. Estimates have shown that online transactions are close to 1/10 of traditional transactions in costs. With this, I think the top executives of the Ping An Bank who joined WeBank know how to take advantage of low cost to lower their lending rates accordingly. Q2. For an individual depositor and small business owner, how banks like WeBank are going to specifically tailor to their needs? Big data will play a crucial role. Based on mouse clicks and previous purchases, companies like Amazon and Taobao are already able to predict fairly well what you are going to purchase. That means they know how much you could afford. So we have reasons to believe that through data collected by Tencent on your behaviour in WeChat and QQ, they know fairly well your default risks on loans and the types of loans you prefer. WeBank especially emphasises on lending to the working class people not necessarily on investment but on consumption spending. I think it is very good news, you could borrow money to go for a vacation. These people do not have enough collaterals in the traditional sense. Soon, I think there will be a series of innovation on risk assessment by peer-to-peer lending companies. Proper deregulation needs to be in place to classify what constitute legal collaterals. There is a large pool of people in China who have usage rights but not transfer rights of their houses. They usually couldn’t use their houses as collaterals. In the online world, if you think about it, if you lend money to people, what makes you think that a virtual outlet on Taobao is less of an insurance than a physical outlet? With big data, more and more things will be used to quantify your credit risks. With no physical branches, WeBank will be able to offer lower fee services. Being private allow them to be more flexible to cope with changes of the market. But there is no free lunch. To force our banks to serve the customers better and to properly control their risks, banks will be allowed to go bankrupt. Proper deposit insurance needs to catch up. |
