Guangzhou, China — Ant Group will share credit data from its consumer finance business with the central bank of China as part of an overhaul of fintech giants.
Huabei is a consumer loan product under the Ant Group. Ant said in a statement Wednesday that data from the loaned product would be sent to the financial credit information database held by the People’s Bank of China (PBOC).
Information such as account opening date, credit line amount, and repayment status will be provided to the central bank. The user must approve this. Specific information such as the time of purchase and details of the purchased product will not be passed to PBOC.
Ant Group managed by Billionaire Alibaba Founder Jack Ma, The blockbuster initial public offering was suspended in November Regarding regulatory concerns.
Ant’s lending business worked on a model that matched borrowers with lenders such as banks, but Ant did not accept those loans. Instead, banks take most of the risk.
This worried regulator believed that companies like Ant behaved like financial institutions, but weren’t regulated like them.
Chinese regulators have ordered the reorganization of the Ant Group. June, the company Given a green light to run a consumer finance business With external shareholders. The business houses Huabei and Jiebei loan products and is known as Chongqing Ant Consumer Finance Co. Ant must undertake some of these loans.
Ant Group is currently in the process of becoming a financial holding company overseen by PBOC and other regulatory agencies.
The Ant Group logo is printed on October 29, 2020, at the headquarters of Alibaba’s affiliate, Hangzhou, Zhejiang, China.
Ally Song | Reuters
The data sharing requirements with the PBOC will help Ant Group align with other financial institutions in the lending sector that need to do the same.
According to Ant Group, some users can already look up Huabei-related records in central bank credit reports.
The company is trying to alleviate concerns that sharing user credit data from Huabei could affect their ability to obtain future loans.
“A comprehensive and appropriate set of credit records will enable financial institutions to better understand the creditworthiness of their users and provide better services,” Ant Group said in a statement.
“Therefore, under general circumstances, normal use and timely repayment of Huabei will not affect the use of other financial services, such as loan applications.”
Kevin Kwek, Managing Director and Senior Analyst at Bernstein, said the credit data sharing agreement with the central bank would eliminate “significant” regulatory uncertainties regarding AntGroup.
“Of course, sharing data undermines Ant’s advantage, but it gives us regulatory blessings, such as getting a consumer credit license,” Kwek told CNBC.
“In my view, this is intended to allow Ant to continue its business, but under regulatory scope and rules, if it serves the broader Consumer Credit Office agenda. It’s important to note that Ant remains very dominant. Large distributors with a user base in mind, even if some data needs to be shared. “
Ant Group shares consumer credit data with China’s central bank
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