The Study Of Transaction Sets On Internet Of Finance

Currently, much attention is given to what is termed “the Internet of Finance”. On onehand, Internet giants are active in the layout of the financial markets. At the beginning of2013,Alibaba then launched the "petty loan" and "Y E Bao"(a kind of online monetary fund). What’smore, Tencent’s Wechat users and functions reached record high. On the other hand, thetraditional financial institutions are approaching the Internet as well. China Merchant Banksand Wechat deeply cooperate in the developing and providing of various financial services, theIndustrial Bank and Minsheng Bank have separately launched E-commerce platforms, etc.This essay is oriented by the study of Transactions Sets on Internet of Finance. In the firstplace, this paper puts forward the three value promotion modes of the Internet of Finance,including the optimization of the resource allocation thanks to the development of Internettechnology, the expansion of transaction sets owing to the minimizing of transaction costs andinformation asymmetric, and the innovation and subversion brought by the spirit of Internet,such as the e-currency and other new products that appear. In the second place, this paperfocuses on the analysis of the Internet of Finance in the theory level, and makes thehypothesis that through reducing transaction cost and information asymmetry, employingdiversification and product restructuring methods, the transaction sets can be expanded.Last but certainly not least, this paper examined the effectiveness of the theory of part IIby the comparative analysis of overseas and domestic P2P companies. The study found outthat the portfolio theory works well on overseas P2P platforms such as Lending Club andProsper, that diverse investment can enable investors to optimize portfolios. However, on thedomestic platforms the portfolio theory only works if certain hypothesis is true. The differencearises from the distinction in pricing and credit rating mechanisms on overseas and domesticplatforms. Therefore, investing in the structuring of products turned out to be better ondomestic P2P platforms.