An analysis of financial internet

Wen/Liubenian

A． Definition of financial Internet

Financial Internet is the use of Internet technology to achieve the sum of the behavior of financing, is in the rapid development of Internet technology, information spread flat in the background, in order to meet people's increasingly rich financial needs of the creation of a series of new financial concepts, new products, new processes. Therefore, under this definition, the traditional financial institutions use the Internet to improve their efficiency is the scope of the financial Internet, in addition, the financial Internet also includes and is not limited to third-party payments, network lending, network assets management platform models.

Two． The Origin and development of financial Internet

The first round of Internet innovation began in the 1990s, and "electronic finance" was born with it. With the rapid development of Internet technology, especially the rapid popularization of mobile internet, large data and cloud computing, the financial world has ushered in the second round of technological innovation, the original "electronic finance" can not fully cover the emerging financial internet concept and industry, so the concept of "financial Internet" appeared, Laid the groundwork for the second round of the financial revolution.

Commercial banks have been the driving and active participants of the financial Internet. Since the end of 20th century, domestic commercial banks have become the initiator and catalyst of the first round of financial Internet innovation, and commercial banks in Europe and America have started to promote the innovation of financial Internet since the early 90.

Network payments, the first half of 2013, the total amount of network payments amounted to about 6 trillion yuan, accounting for about 0.5% of the total payment, accounting for the total amount of electronic payment 1.3%. Although the scale is not large, but its long tail characteristics of the Internet is obvious, single sum is very small, but trading volume is very large, the future growth of space.

Network lending, the current domestic active Peer-to-peer platform has more than 300, 2012 the entire Peer-to-peer Network loan volume reached 20 billion yuan, 2013 Peer-to-peer network loan scale reached hundreds of billions of dollars.

Network finance, to Ali Group's "balance treasure" the most typical, this only June 13, 2013 on the line of the Money fund products, in early November received more than 30 million customers of the total subscription of 100 billion yuan, become China's first large-scale money fund.

In terms of total business, commercial banks still occupy the absolute advantage of payment, loan and financial market. Payment, in the first half of 2013, the total amount of electronic payment in the country amounted to 468.61 trillion yuan, the third party payment institutions 6 trillion yuan of the total payment accounted for only 1.3%; on loan, according to the information disclosed by the People's Bank of China, In 2012, RMB loans increased by 8.2 trillion yuan, while the total amount of peer-to-peer lending (20 billion yuan) accounted for only 0.24%. In the financial products, although the current financing of the Internet channel sales of the total fund products are not accurate statistics, but in terms of the total amount of public offering fund is smaller than the bank's financial products, and public offering funds distribution channels, the bank still occupies the main position.

Three． The importance of the development of financial Internet

Looking back on history, the internet is changing a traditional industry in an irresistible situation, and the financial industry is no exception in the face of the internet wave. The financial sector is also more adaptable to interoperability, and the integration of the Internet will magnify this feature. In addition, the financial sector is a data-intensive industry where services can be highly computerized. Finance itself is a general benefit, the object of service also includes a larger number and scope of small and medium-sized enterprises and individuals.

From the market basis, China has a large small and medium-sized enterprises and individuals on the financial Internet services have demand. There are 15 million enterprises in China, 45 million households, total in 60 million, of which 99% are small and medium-sized enterprises. So in China, the financial Internet is facing an extremely large market. The key is to achieve efficient and low-cost services through Internet innovation, and even to achieve marginal cost increments near zero when business is increasing.

Financial Internet is the reconstruction of traditional finance. The first is the restructuring of the financial market infrastructure. Includes: the reconstruction of the payment clearing market: The relationship between Third-party payment and UnionPay is complementary. The relationship between mobile finance and Pu-hui Finance: The development of mobile finance is bound to bring a great prospect to the financial Internet; Thirdly, the financial Internet is a reconstruction of the indirect financial model, in a sense, peer-to-peer, Third-party Financial management, Ali small loans and other forms of finance Internet are also the reconstruction of traditional banks; third, The financial Internet is the reconstruction of the direct financial model, which is mainly the mode of public financing. The rise of the public-chip model may replace the exchange for some time to come, and future entity-line exchanges may be replaced or reconstructed.

Four． The form of financial Internet

(i) Third party payments

1. Summary of third party payment

For a long time, the central Bank of China has continuously improved the payment and clearing system, and it has been established and perfected by the city Exchange system, the bank's inward remittance system, the domestic foreign currency payment system and the national electronic joint-line system.

Sketch of payment and liquidation system in China

The third party payment institution in the narrow sense refers to the intermediary institution which is independent of E-commerce merchant and bank, and through the agreement with each commercial bank, makes it possible for some form of data exchange and related information confirmation between the merchant and the Commercial bank, and finally realizes the transaction funds transfer between the merchants and the consumers. China's Third-party payment originated in 1998, the Beijing municipal government and the People's Bank of China, the Ministry of Information Industry, the Ministry of National Trade and other central ministries to launch the capital E-commerce project, and determine the capital electronic mall for online transactions and payment intermediary model platform.

1999, Beijing "first letter Easy" payment officially run, become China's first to achieve across the bank, across the region to provide a variety of bank card online transactions on-line payment service platform.

2003 years later, with the rapid development of e-commerce in China, in order to better solve the network shopping, network transaction funds payment problems, to achieve the Internet and the financial intranet docking, with "Alipay" as the representative of the Non-financial organization payment organization rapidly developed. Alibaba's data show that in 2006, the total amount of Taobao transactions exceeded 16.9 billion yuan, is Wal-Mart in China's annual turnover of 1.7 times times, by the end of 2012, its Taobao and the days of the total turnover of the cat over 1 trillion yuan, Alipay has become China's largest third-party payment tool.

2008, after several years doubling the rapid development of online payment transactions on the scale of the first breakthrough of hundreds of billions of dollars, reached 235.6 billion yuan. At this time, the development of online payment business has broken the traditional payment and settlement method, and gradually become an important part of our financial payment and settlement market.

By the end of 2012, there were 437 third-party payment organizations in the country, of which 197 were awarded the central bank's third party payment licences.

2. Type of business paid by third party

According to the scope of business, non-financial institutions ' payments include network payments, prepaid cards and bank card receipts, etc. (shown in the table below).

(1) Network payment

According to the business Operation mode, the third party payment agencies engaged in network payment can be divided into two categories: one is relying on their own E-commerce platform, Internet users of the Internet-type payment agencies, they are mainly online payments, bundled with large e-commerce sites, such as Alipay, Tenpay, and the other is not involved in the sale of goods in the payment agencies, That is to pay attention to the payment of financial institutions, such as UnionPay electronic payment, quick money, etc. (shown in the table below)

(2) Prepaid card

Prepaid cards can be divided into two main categories according to the issuer: one is a multi-purpose prepaid card, where the market value is issued by a franchise issuer, a prepaid card, such as a credit card and a letter of credit, that can be used by a number of contracted clients in shopping malls, convenience stores, restaurants, etc., and the other is a single purpose prepaid card, which is issued by a commercial enterprise, Only in the enterprise or agree to brand chain enterprises to buy goods or services, can not be used across legal persons prepaid cards, such as Carrefour card.

(3) Bank card receipt

In the bank card receipt business of a third party payment institution, the third party payment institution undertakes the responsibility of clearing the transaction information and clearing the funds by the liquidation organization, as well as the responsibility of the receipt management, which should be responsible by the receiving bank, and make the relevant business rules by the payment institution, and the cardholder's transaction information "landed" to the third party payment institution. In the process, each Third-party payment organization has established a small receipts business framework linking multiple commercial banks.

2012, the third party payment business transaction size reached 10.1 trillion yuan, of which the bank card receipts and internet payment is a large proportion of the transaction size of the two types of business, as shown in the following figure

Third party payment transactions in China in 2012

From the payment business of all third party payment organizations, 2012 UnionPay Business by virtue of the absolute advantage in the bank card receipts business to 45.9% of the market share leader in the payment of enterprises, Alipay, remit to pay the world, communications payments, Tenpay 2-5, respectively, as shown in the following figure

3. The significance of third party payment

As an important part of modern financial service industry, third party payment not only plays an important role in promoting the development of e-commerce, making up the blank of banking service and improving the efficiency of financial transaction, but also has played a significant part in perfecting modern financial system, perfecting modern financial function and enriching the connotation of modern finance.

Third-party payments have also benefited from the development of E-commerce, but also further promote the development of Internet transactions. Payment problems and credit problems have always been the important factors restricting the development of e-commerce, the emergence of payment companies, as the intermediary of buyers and sellers, relying on its own credibility and trading rules, effectively solve the online transaction payment credit problems, improve the trust between traders. In addition, the third party payment platform reduces the transaction cost, has opened the fund transfer channel between the merchant, the customer and the bank, has avoided the bank to provide each merchant and the customer the payment gateway the trouble, has saved the development expense.

4, the third party to pay the future development trend

(1) The share of mobile payment will be expanded rapidly

Due to the cost of terminal renovation, user habits and industrial cooperation mode, the current share of mobile payment is still small, but with the popularity of mobile phone and Lakara terminals, the promotion of high-speed mobile network, the use of two-dimensional code technology and the establishment and unification of mobile payment standards, Mobile remote payment will gradually get rid of the shackles of technology, into a high-speed growth period.

(2) The share of Cross-border payments will gradually expand

At present, the domestic mainstream third-party payment enterprises pay treasure, tenpay, fast money, yeepay payment, and so on, through with overseas electric business enterprises and banks and other financial institutions to engage in cross-border payment business. In the future, with the development of the global online shopping market, the demand of consumers will be increasing, and the internationalization of RMB will increase, and the share of cross-border payment would be enlarged.

(3) The scale of bank card receipts will be further increased

With the continuous growth of bank card scale and the gradual improvement of bank card accepting and receiving rate, there is a huge space in the online credit card consumption market. Offline billing business On the one hand can be innovative payment methods for the public to provide convenient and efficient payment services, on the other hand will accelerate the small and medium-sized businesses and two or three-line regional market penetration. Payment agencies will also reap greater profits from these developments.

(4) The establishment of independent payment company. 2012, in order to shorten the capital chain, Jingdong Mall to the Third-party payment company Net Silver Online carried out a complete acquisition, the formal layout of the independent payment system, the realization of the electric business, logistics, procurement, third-party merchants, buyers of the advanced flow between the completion of the industrial chain upstream and downstream integration. The acquisition marks the official accession of the electric business enterprises to the third party payment ranks. In the future, with more and more powerful electric business enterprises, traditional industry groups, internet giants, telecom operators, such as the establishment and development of independent payment companies, industry competition will continue to intensify.

(5) The problem of traditional commercial bank payment is solved gradually. With the opening of the Super net and UnionPay interbank payment channels, traditional banks will complement their payment short board and will compress the third party to pay the company's living space

(6) Entry of overseas payment institutions. China has the world's largest electricity market, which will surely spur more and more overseas payments agencies like PayPal to log in to China and participate in fierce market competition. In particular, driven by the development of cross-border trade and outbound tourism, and with the cancellation of some restrictive barriers to entry, the future Third-party payment market in China will present a situation where domestic and foreign institutions are contending for supremacy.

(b) Peer-to-peer network lending

1. The role of commercial banks

Commercial banks exist in modern society for 600 of years, and the reason why they can keep on growing and growing has benefited from its capital pool model. The bank first absorbs the money and then lends the money, from which to earn spreads as income, the commercial Bank of this pool model, so that the bank has been holding a part of the funds ready to be available, so can solve three problems: first, for borrowers, can effectively borrow (a short period of time to obtain large sums of money); Can spread the risk effectively, third, plays the trans-time, the space intermediation exchange function.

2. The role of Peer-to-peer

With the development of the network, communication and communication between people become more convenient and lower cost, this kind of efficiency makes it possible to solve the above three problems with the capital pool of traditional commercial banks.

Peer-to-peer Internet lending can solve the first problem-borrowers are efficient borrowers. Unlike commercial banks, peer-to-peer network lending first find borrowers, the issuance of borrowing needs can be a limited period of time to receive a large amount of loans, which mainly benefit from the network information exchange efficiency, large supply of funds and investment objective yield.

Peer-to-peer Network lending solves the second problem-lenders are able to spread risk effectively. Because of the high efficiency of network information exchange, the platform will publish all the borrowing demand on the Internet, the lender can invest 1 yuan, so that he could make a little money and lend it to as many borrowers as possible.

NET Bank and third party payment can solve the third problem------------------time and space. Along with the digitalization of money, the development of Net Bank and third party payment has effectively solved the problem of the financing of time and space.

3, Peer-to-peer network lending mode

From the point of view of no advance, pure Peer-to-peer network lending mode, platform to do only intermediary, the borrower through the platform to submit the demand for loans, the platform to do online audit, and then issued the target, the lender bid, the platform does not participate in the financing of lending transactions, the borrower's overdue for the loss caused by the lender, the platform does not give advance. Advance the principal of Peer-to-peer network lending model, 2009 Red Ridge Venture put forward the principle of the principal, lenders to the principal security concerns have been improved, the network loan industry has gradually entered the people's vision.

(c) Public financing

1, the definition of public chip

In the context of English crowdfunding, the broad masses are the use of the Internet and social network communication characteristics, so that small and medium-sized micro-entrepreneurs, artists and individuals to the public to show their company, ideas or projects, to solicit public attention and support, and then obtain the funds needed to meet the financing goals.

2. The origins of the public

For entrepreneurs, project financing can be through family, friends, but susceptible to irrational intervention, another channel is a bank or small business loans, but the audit process cumbersome, long reply.

For investors, non-compliance investors are not allowed to make public investments under the law, and non-compliance investors can only participate in start-up financing through offline private placement. In addition, the restrictions on geographical conditions, without the guidance of the Internet, without information sharing and lack of internal resources, the opportunity for investors to invest in start-ups is very small, and the cost and higher costs.

April 5, 2012, U.S. President Barack Obama signed the Jobs Act, where the second and third of the bill involved a platform for public financing. The second bill aimed at compliance investors, which had previously been advertised only privately for compliance investors, now provides for a general solicitation and advertising campaign against compliance investors. The provisions of the Bill default to compliance investors have a sense of risk. The third of the bill for the non-compliance investors, the more important rules are the amount of transactions, corporate disclosure and the platform for three points.

2. The mode of public financing

Reward Type: Rewards the public platform to repay the product or the service. Projects in the absence of a full start to raise money, driven by the funds, products produced after the feedback to investors.

Donation: Donors do not expect anything in return on the basis of public and charitable financing.

Debt: Peer-to-peer companies on the internet belong to the creditor-type platform, the platform to return the principal and interest.

Equity Type: The shareholding platform is based on investors ' shares.

3. The development of public financing

In October 2013, the World Bank's latest report on the development potential of developing countries shows that the current public-chip model has become a billions of-dollar industry in 45 countries around the world. It is expected that by 2025, China's public chip will reach 46 billion-50 billion U.S. dollars, the world's developing countries will reach the size of 96 billion U.S. dollars, China's public-chip will account for half of the size of developing countries.

The world's leading platform for the number of platforms more concentrated. The United States has 344, ranked first, Britain has 87, ranked second, France has 53, ranked third.

(d) Internet insurance

In recent years, with the in-depth development of data centralization of insurance companies, the overall competitiveness and modernization level of insurance industry has been increasing, and Internet technology has been paid more and more attention by enterprises. In the future, China's insurance industry will usher in a broader space for development, and the Internet will play an important role in the development of insurance industries.

1. The development of Internet insurance

Internationally, with the advent of the information society, E-commerce in the United States, Western Europe and other developed countries and regions are very rapid development. According to statistics, the U.S. online insurance premiums as early as 1997 as high as 390 million U.S. dollars, and 2001, about 1.1 billion U.S. dollars in insurance premiums are obtained through the network. In 2005, about 20% of the UK's insurance will be sold on the Internet. Japan has emerged as the first insurer to sell its insurance business entirely through the Internet. As one of the world's largest insurance and asset management group, France's Sheng Group, as early as 1996, the trial of online marketing.

At present our country Internet insurance divides into three kinds of development pattern: the first kind is the insurance company builds the website, mainly sells own company's product, like: safe, Taikang online, sunshine Insurance and so on. The second is an intermediary company's insurance website, which does not belong to any insurance company, but also sell insurance products, such as: Big Boy, Yi Bo Prudential and so on. The third kind is the insurance information type website, is regarded as the industry personage's BBS, like China Insurance net and so on. However, Internet insurance in China is only a new thing, the main limitations are:

Functional limitations. The main function of the network insurance has been limited to insurance consultation, the kind of browsing, the intention to insure, the online complaint report, the simple investigation market demand, the simple insurance online insurance and so on.

Lack of online interaction. In the network sale aspect, also is in the initial static information to give the stage, in the customer service aspect, also only is in the service information provision stage.

Fewer customers. Network insurance customers Less, the current network insurance market segmentation is obvious, needs long-term market population training. The main consumer groups are 80, 90 's.

Greater risk. Network system security problems, and in the absence of rich policy holders and insurance companies and policyholders are not face-to-face contact, the network insurance is very easy to bring moral hazard.

2. The important role of internet in the future development of insurance industry

Internet technology will become an important assistant means of insurance Enterprise decision analysis. At present, the insurance industry has accumulated a large amount of data information, if the use of traditional, manual methods to deal with, it is difficult to play its value, can not reach a comprehensive and accurate conclusions. Companies rely on strong network information technology, planning advanced system architecture, establishing decision support system based on data Warehouse, realizing the transformation from online transaction processing to online analytical processing, comprehensively and multi-dimensional interpreting all kinds of information, digging into the value of it, can accurately grasp the market and make decision which conforms to the future development situation. For the insurance business to lay a good foundation for tomorrow.

The Internet can provide protection for product innovation in insurance industry. The product homogeneity is serious, easy to be duplicated is inside the insurance industry to have a phenomenon, this has greatly affected the company's innovation enthusiasm. Also as a financial services industry, Pudong Development Bank relies on the advantages of Internet technology to circumvent the problem: The complete framework of product innovation in the powerful, design-led IT systems, not only to enable enterprises to quickly adapt to the needs of the market, but also improve the threshold of replication. Competitors want to replicate similar services, in addition to understand the product design patterns, but also have to modify their own system, which obviously greatly increase the difficulty of replication. The success of Pudong Development Bank is worthy of reference from the insurance industry, and give full play to the advantages of information technology, not only can vigorously promote innovation, but also protect the achievements of innovation, promote the whole industry innovation consciousness.

The powerful Internet helps insurers open up new sales channels. One of the important ways of future financial development is to open up new channels. At present, China's insurance industry has been involved in online sales, other electronic channels are also being explored, which has many problems, such as the security of the transaction, sales of both sides of the interaction and follow-up services, need to rely on network information technology to solve. Whoever takes the lead in making a breakthrough, who is likely to win the initiative in the future competition. With the financing of the investment bank is due to the early start of the project, only in the domestic first launch of the "one Netcom" and online hosting banking business, become the leader in the industry. The success of the bank has amply demonstrated that Internet technology will become an important weapon for the insurance industry to compete for future sales channels.

The internet helps to improve the quality of service in the insurance industry. With the increasing of market subject, the competition of insurance industry becomes more and more fierce, the quality of service has become an important factor for insurance companies to attract customers. Strong information technology can ensure the stability of the business system, improve the efficiency of daily work, to provide customers with faster, better, more secure services, thus directly enhance the quality of service industry. This is amply demonstrated by the success stories of the securities industry. 2007, the stock market volume soared, but the company's business system withstood the test to a stable, convenient and efficient service to win the recognition of customers. According to industry insiders said, since 2006, the major securities companies have increased the information construction efforts, successfully completed the system expansion and upgrade, thus safeguarding the big market to temporary company business Smooth. At present, China's insurance industry is in the golden period of development, business scale growth rapidly, to ensure the future quality of service, information technology support is also essential.

Internet technology will promote the professional and group development of insurance industry. China's insurance market is becoming increasingly competitive. The author thinks that in order to better adapt to the market, the smaller companies may be transformed into professional operation, while the larger companies may achieve collectivization and cross-industry development. The specialized insurance company must experience the business Unit optimization, the process optimization, the final enterprise optimization, the external need to strengthen cooperation with external partners, and internal optimization and external cooperation are inseparable from the network information technology support. Group development of insurance companies may be involved in banking, securities and other fields, to achieve cross-sectoral operation, which requires the internal system to achieve standardized information transmission. At the same time, with the high concentration of cross-industry data, the system has higher requirements in logic architecture, stability, data processing capability and security management. All this will bring new challenges to information technology.

3. The development trend of Internet insurance

Further strengthen the cultivation of the market. Determined to be a potential target audience for the group, they are a loyal supporter of the network.

Deeply do the needs segmentation. In the network platform will need to subdivide, the different safeguard function manifests the official net fun. Pay attention to the importance of customer experience, so that customers through the official website to do demand analysis, fast and easy to find suitable for their products. Do a sound customer information record (large data), analysis of customer attributes and preferences, according to customer demand research and development products.

In the product aspect, simplifies the product insurance process, the consummation payment method, pays attention to the customer experience, enriches the product line, according to the customer demand customization product. Risk fragmentation by customer choice of risk factors underwriting pricing

Adopt the development mode under the line driving line. To realize the network of insurance Information Consultation, insurance plan design, insure, payment, underwriting, underwriting, policy information Inquiry, change of security right, renewal payment, claim and payment, etc. Have a sound Customer consulting service system and offline service system. In the customer demand from the line into the line, there are departments responsible for the completion of the consultation and then back to the online records and customer information to improve.

(Liubenian/Beijing also Zhuang International Investment Development Co., Ltd.)

(Responsible editor: Mengyishan)