In-depth explanation: Internet Finance Law

2013 is definitely an extraordinary year for the Internet, especially in the internet finance field. It can be said that the year 2013 was the first year of internet finance. With the emergence of yu'e Bao, traditional finance was overwhelmed. Some people even used the word "Revolution" to describe the huge impact of internet finance on traditional finance, however, I believe that traditional finance is indeed affected by new technologies in new fields, but it is not revolutionary yet, at present, internet finance is more convenient and simple to implement electronic transactions and rely on information technology to implement financial activities. However, there is only one thing that cannot be ignored, that is, the space and time efficiency brought by Internet technology have a huge impact on people's living habits and thoughts.

Why do Internet technologies, rather than financial innovation, or explosive growth in a financial field, break the traditional financial calm? To get this answer, you may have to start from the predecessor of traditional financial. In 1978, China's banking industry entered a period of reform, and the modern financial industry gradually grew up in the land of China. After thirty years of reform and opening up, we have financial activities that have been learned from advanced Western ideas, such as commercial banks, securities companies, fund companies, and trust companies. With the financial activity and the complexity of financial services, the risks and drawbacks of domestic financial institutions are gradually revealed. To avoid the risks of financial activities, more financial institutions have invested in the so-called high-quality customers with good reputation, strong capital, stable and low risks. Provide resources to them through loans, financing, investment, and other forms as much as possible to protect their own interests and reduce their capital risks. In other words, financial institutions have invested 80% of their resources to 20% of enterprises, making it difficult for the remaining 80% of enterprises to get help. This makes the industry insiders a culture that avoids innovation and risk-taking, everyone hopes to follow this process to make progress and financial activities lack vitality. This is the current situation of traditional financial industry.

The emergence of Internet technology has just brought about an opportunity to change the traditional financial industry. The development of the Internet has influenced every aspect of us, and our thinking has gradually become networked. I often see people begging on the roadside in downtown areas. Sometimes I think that if 10 thousand people pass by him every day, 200 of them give him 1 yuan, and no labor is needed every day, a net profit of 200 yuan, each month, there is a stable revenue of 6000 RMB. From the perspective of beggars, it seems that 20% of "customers" bring extremely high profits to them. In addition, when a new life begins at home, relatives and friends will send all kinds of gifts to congratulate, so that many gifts will be idle in the corner if they are too late to use. When you find it, it is no longer suitable for use. In the traditional way, either give away or discard it. However, in the Internet era, in addition to sending and throwing away, it can also be put online to sell second-hand new products at a lower price than normal retail prices. In the vast ocean of connected networks, there may be buyers who need it, and it is inexpensive and elegant for buyers. This kind of Internet-based tacit understanding is also an excellent transaction activity. This is an invisible embodiment of the emergence of Internet technology to compress the space and time of activities. Unlike traditional finance, the emergence of internet technology no longer focuses on a certain point or a part to influence the whole aspect. Her focus is on the whole aspect, it affects every point in the face. This is also the logic that the famous "Long Tail Theory" tells us: it is more important to pay attention to the forces that are ignored or underestimated.

The examples of beggars are nothing more than to enlarge the scope of discovering good people to downtown areas. As long as 20% of them can give no charity, they will not experience a very bad life. Online shop opening is nothing more than enlarging the market to the entire network, as long as 20% of people are willing to bid to buy, sellers can generate sales. Theoretically, As long as 1.3 billion people in China send a dollar to an organization, the Organization will be able to help 1.3 billion of enterprises with 80% yuan. This is why internet finance is different from traditional finance. The appearance of yu'e Bao greatly shocked the traditional financial industry. In just one month, it broke 10 billion yuan, and the number of customers broke 4 million. Why? In the traditional financial industry, the initial investment volume of goods base is RMB 500, while yu'e Bao is RMB 1. What makes traditional financial sense!

Internet Finance follows a certain logic. The theoretical support behind it is the long tail theory, which targets millions of people-for traditional financial institutions, the value of this group is not worth mentioning. However, internet finance has brought together a large number of groups by providing them with online services, forming a very large scale.

In-depth explanation: Internet Finance Law