Ant Group shares consumer credit data with China’s central bank

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Guangzhou, China – Ant Group will share credit data from its consumer lending business with China’s central bank as part of a fintech giants overhaul.

Huabei is a consumer loan product from the Ant Group. Ant said in a statement on Wednesday that data for 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 it. Specific information such as time of purchase and details of the product purchased will not be transmitted to PBOC.

Managed by Alibaba’s founding billionaire Jack Ma, Ant Group halted its initial public offering in November due to regulatory concerns.

Ant’s lending business operated on a model that paired borrowers with lenders such as banks, but Ant did not accept these loans. Instead, the banks take most of the risk.

This worried regulator believed companies like Ant behaved like financial institutions, but weren’t regulated like them.

Chinese regulators have ordered the reorganization of the Ant group. In June, the company was given the green light to run a consumer credit business with outside shareholders. The company is home to the Huabei and Jiebei loan products and is known as the Chongqing Ant Consumer Finance Co. Ant must take out some of these loans.

Ant Group is currently in the process of becoming a financial holding company overseen by the PBOC and other regulatory bodies.

The Ant Group logo is printed on October 29, 2020 at Alibaba’s subsidiary headquarters in Hangzhou, Zhejiang, China.

Song of the Allies | Reuters

Data sharing requirements with the PBOC will help Ant Group align with other financial institutions in the lending industry who need to do the same.

According to Ant Group, some users may already look for records related to Huabei in the central bank’s credit reports.

The company is trying to allay fears that sharing Huabei users’ credit data will affect their ability to get future loans.

“A complete and appropriate set of credit records will allow financial institutions to better understand the creditworthiness of their users and to provide better services,” Ant Group said in a statement.

In my opinion, this means that Ant intends to continue operating, but within the framework and rules of the regulations.

“Therefore, under general circumstances, the 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 deal with the central bank would remove “significant” regulatory uncertainties over 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 opinion, this is meant to allow Ant to continue in business, but within the framework of regulations and rules, if it serves the larger agenda of the consumer credit bureau. It is important to note that Ant remains very dominant. Large distributors with a user base in mind, although some data needs to be shared. “


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