| Internet finance becomes more and more popular in China, and its development in China has entered a period of rapid growth.On January 4th, 2015, with the witness of Chinese Premier Li Keqiang, the bus driver Xu Jun got a loan of 35,000 yuan from We Bank, which is its first lending business as China’s first private bank opened on the Internet.The three main shareholders of We Bank are Tencent, Bai Ye Yuan Group and Li Ye Group, We Bank is an Internet bank essentially operating via the Internet and focusing on small loan business model, and the clients of it are mainly working-class, freelancers and other personal consumers and small and micro enterprises.The appearance of We Bank is the achievement and reflection of the latest innovation of Internet finance, and the innovation is reflected in the most obvious form of financial services, We Bank abandons the traditional physical business outlets, providing complete accounts, certification, credit rating as well as loans through the Internet, which means the entire process takes place in service over the Internet. While encouraging the development of We Bank, we should also realize that, although innovation can bring about change, even "Forcing traditional financial institutions to reform", but at the same time, the process of financial innovation is also usually accompanied by various risks. We Bank also have some risks.This article takes the innovative models of We Bank for example, talking about the concept, patterns, elaborate innovation of We Bank, combined with the experience of United States and the European Union in the current development of Internet banking, and pointed out the risks and other issues faced by We Bank in its development process in the future. The essay finally makes recommendation in the end for We Bank and other China’s Internet industry.In the first chapter, the author focuses on analyzing form of We Bank which is the latest innovation form of Internet innovation. Because the Internet is a brand new pattern, so the author first introduces We Bank’s basic and fundamental information, and then introduces, including the approval from the China Banking Regulatory Commission to build the bank, then the author talks about the business model of the banks, noticing its two major innovations: the first is locating in small loans; and the second is to abandon the physical business outlets, taking the use of online business model.After the discussion of innovation, the author analyzes the external advant ages which mainly refers to the Chinese government who is currently impleme nting inclusive financial development goals, making most people have the oppo rtunity to enjoy the outcome of reform and opening up policy, and enjoy mod ern financial services, breaking the previous financial constraints of serving onl y for big customers, and the model of We Bank is just in line with national po licy guidance of the development of inclusive financial goals. Although the dev elopment of We Bank need external policy, but it also has several advantages w hich could be mainly concluded in two aspects: First, the use of large data to credit. Tencent has a mass of user data on its social networking platforms, w hich is very helpful for large data credit even the confirmation of consumer’s credit level of financing, thus this is We Bank’s inherent advantage, if the bank could be able to fully exploit the use of big data, then this could help We Ba nk a lot in the competition; the second is the use of face recognition technolo gy, one of the reason why We Bank has the courage to plan to achieve online operation completely is that the regulatory commission is loosening the approac h for remote account opening, so once consumer is able to open an account and authentication through the network at any time, then people could acquire h uge convenience, and this is very attractive for common consumers.In the second chapter, the author analyzes the situation of US Internet banking and European Union Internet banking since 1995 when the model first appeared. US Internet bank developed rapidly, and many countries followed. EU’s development came up later, but because of its well-developed network technology, it also made the rapid development of Internet banking. The author compares the Internet banking model of United States and the United Kingdom which is the representative of the Europe, and discusses legislation, regulation style, and regulatory agencies respectively, and discuss the market position, market outlook, operation capability of the Internet banking in United States. It should be noted that in this period, the US Internet banking has also undergone a mass phenomenon. Finally, the author analyzes the experience and lesson for We Bank and other Internet bank in China from the development of Internet banking in the United States and the European Union.In the third chapter, the author analyzes the problems and risks that may be encountered We Bank, and proposals that some measures should be made to solve them. We Bank faces some risks that exist in most Internet finance models. The first is credit risk. Commercial banks generally strengthen customer credit recognition and judgment, supervise the use of funds, and other ways to extract the bad debt to prevent the occurrence of credit risk. We Bank loans through the network, once data tampered or loan is stolen, customers’ confidence on We Bank will be affected. Although great improvement could be achieved by moving the traditional banking business to the Internet, but it also has been a challenge issue for network security. Secondly, We Bank is facing the authenticity and accuracy of big data. Using big data to credit and decide the amount of loans is a unique advantage of We Bank, but the data on social platforms is not always true and effective, if we take We Bank as a tall building, then the big data is the base of it, only when the foundation is solid, could the building be strong.The other risk is that even if big data could be collected from Wepay, Wechat, QQ, and online evaluation and other channels, invasion of privacy is also a problem existed, which is a difficult problem for We Bank to overcome among big data usage. Furthermore, We Bank is facing the violation of consumer right to privacy, property rights and other risks in the process carried out in the Internet financial services, which need to be reduced and eliminated in formal operation by effective measures. To avoid risks, the author thinks that, firstly, it is important to improve legislation, the legislation is the base of development, without legislation, the development of We Bank would lack enough security and legitimacy, also, establishing and improving the risk and improving risk control system has an important role in its development; the second one is to improve the credit system, improving credit system and taking all financial institutions into the circle of credit are two important sectors of enhancing the quality of financial services, as well as preventing credit risks, furthermore, improving consumer protection mechanisms is also meaningful, to strengthen financial consumer protection is to enhance consumer confidence in the financial markets, which could protect the sustainable and stable development of Internet banks; the last one is to promote innovative network security technology, creating a nice operation environment for Internet banking services.The development of innovative process will not be easy, but it will never stop the pace of development, because innovation is essential to ensure the energy of financial market. Healthy development of We Bank cannot be reached without moderate external supporting. If appropriate regulation and guidance could be given during the innovation process, and measures could be taken to promote its advantages and reduce its weaknesses or deficiencies, then this innovation will be able to produce positive effect to the financial markets and the economy."Long-awaited, still holds partly concealed", although We Bank has not officially open at the end of the composition of this essay, with the trend of the fast development of Internet finance, Internet banking will walk on the stage of history in the near future, and the author takes an optimistic attitude in general. |
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