Dong Jun: The pain point and opportunity behind the decryption of the Peer-to-peer chaos

Source: Internet
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Donews July 7 News (reporter Qinye Yan) talk about corporate borrowing, in the past there are usually bank loans and private lending in two ways. But the bank loan threshold is high, the formalities cumbersome, time-consuming, will many urgently need the loan enterprise to block outside the door. While the low threshold of private lending, but high interest, can only be used for short-term capital turnover, and can not be used as a long-term source of financing for enterprises.

With the development of the Internet industry, for financing difficult small and medium-sized enterprises, now more Peer-to-peer network loan option. Information technology, represented by the Internet, dramatically reduces information asymmetry and transaction costs, and compensates for the deficiencies of formal financial institutions that benefit both investors and borrowers. Borrowers have access to credit-financing channels that are more convenient than private borrowing, and pay lower borrowing costs, and investors can get higher returns than bank deposits.

Block Box is a representative of Peer-to-peer platform, rapid development. After the launch in August 2013, the current platform cumulative transaction turnover of more than 1.3 billion, services more than 350 enterprises, the average financing amount of 3 million. Dong Jun, its founder and CEO, said in an interview with Donews that China's small and medium-sized enterprises have many financing needs, but in the bank is not very good service, private borrowing costs too high, which also left a lot of space for Peer-to-peer platform.

Dong Jun said that the reason for the rapid development of building blocks was the preparation of data information for the previous year. For Peer-to-peer platforms, risk control is the core. There can be no risk at all, the platform to do is to minimize the risk, and to both the financial and Internet at both ends, both to understand the financial, but also to understand the Internet.

He argues that the pros and cons of a peer-to-peer platform are based on both financial and Internet attributes, and that the security of the financial side, the rationality and liquidity of return, and the product experience on the Internet are important indicators of consideration.

Dong Jun that the current Internet financial sector is half the sea and half the sun. On the one hand, faced with larger market demand, on the other hand, there are a lot of negative news. For Peer-to-peer industry, is still in the early days of the industry, the most important competitive point is how to better serve customers.

In addition, he believes that the ultimate core of internet finance strategy will be reflected in the data, for the surge in the Peer-to-peer industry, access to the data phase will be a run-off, in a year will be such a decisive victory.

The following is the Dong Jun Readme collation:

The outbreak was quick because there was sufficient preparation

I have two major work experience before, one is in the United States for 6 years as a trader, and then returned home to do a period of time in the small and medium-sized enterprises financial services, including financing consulting, capital guarantee, small loans. Half of the more theoretical experience, such as the two-tier market based on data making decisions, half of the field experience, according to specific business or individual needs to do risk assessment, risk management.

At present, China's small and medium-sized enterprises have a lot of financing needs, but in the bank is not very good service, private borrowing costs are too high, this is a peer-to-peer platform left a lot of opportunities and space. Before making the building block box, the founding team first cut into a data company in early 2012 to work out how to make small microfinance more effective. The system has done more than 500 customers, starting with some foundation, and now there are more than thousands of companies in the database. We are also a prepared start-up company.

The A billion of dollar turnover is a very small number for financial services. Peer-to-peer industry is a trillion-level market, the entire industry is still in the initial stage, to go the road is still very long. The building blocks can have a relatively fast start in a relatively short period of time and are related to the group background. We now understand the "building block" portfolio more and more deeply, the combination of mobile products, risk combination, the future may have a combination of patterns, to better risk control to provide customers with services. So we think that the combination is very important, which ensures that we can get started very quickly.

The logic and steps of wind control

Wind control is a very important point of Peer-to-peer platform, first of all, we must solve the problem of wind control.

First of all, the mode of our landing now is the information platform, the information platform itself can not participate in the transaction. Our philosophy is not to subvert the financial sector and reduce risk. It is better to disclose the risk and let the customer choose. Today's market is immature, and most customers are less able to take risks or anticipate risk, but we have to do it in this direction. Building block box positioning sincere and transparent Internet finance is not to reduce the overall risk, but to seek a direction to configure and distribute risk.

On this basis, we have devised a set of systems to circumvent several common risks encountered in finance. The first is the project risk, through almost a year of time to do the data system, the more real borrower data mining to analyze, as far as possible to reduce corporate credit, default risk.

Second, we have done some remedial measures, such as some projects will take the mortgage, some will provide security, as a remedial measure for already have a certain credit quality customers do some endorsement.

In addition, we have added a number of mutual insurance, also known as the scheme of risk insurance. An insurance plan that is equivalent to all the borrowing clients on the platform. Customers take out some of the relatively small funds for the platform in the event of extreme risk, cushion a layer of risk for investors. In the end it's not a total risk-free lie. The most important thing is to put the system in the end to what kind of risk to tell investors, so that different investors to choose their own acceptance of the risk, at the same time matching the corresponding income.

How to collect enterprise information and get projects?

Building Block box in the collection of enterprise information, is based on traditional to improve the tradition, on the basis of traditional innovation. First, the risk model and data control or based on matching, for many years of the plate what is the most important thing to the enterprise or borrower, we first seize these, the risk of this reduction.

Collecting information about these people is a process based on traditional finance. The building block box is an optimization of this process. Enterprise's many information such as some enterprise's business license, before needs to go to the Trade and Industry Bureau to take, now can obtain on the net. Corporate bank statements need to go to the bank to print, and now they can be obtained through net silver. We do some optimizations where we can optimize. Optimization is not the place, we go to optimize the process, rather than optimize its way.

Platform's current business sources are mainly two, the vast majority of the channel from their own development, followed by the cooperative guarantee Company recommended.

On the acquisition of a project, the priority of risk is higher than the priority of growth, and a reasonable portfolio priority is higher than the priority of the larger investment matchmaking. So we're going to be more cautious at the end of the loan. Mainly into the more healthy industries, groups, in these industries and groups to develop products, design the entire risk framework and model, should be in a slow pace, some things do need time to accumulate, with the star products, to be relatively cautious to accumulate data, After a certain foundation, it should run faster.

How to judge the pros and cons of Peer-to-peer platform?

Now the market has a lot of judgment Peer-to-peer platform good or bad strategy, but the river is still relatively messy, it is difficult to say who has the highest martial Arts. The financial thing must be pulled out of time to see it. For Peer-to-peer platform itself, the first to have the financial product design, operational capabilities. This is where the core risk is being controlled. The second is to understand the Internet users need to have the product, market capacity. Again, the technical ability to make the whole system smoother and safer is important.

The pros and cons of a peer-to-peer platform are based on the attributes of finance and the Internet, and the security of the financial side, the rationality and liquidity of return, and the product experience on the Internet are important indicators of consideration.

In terms of finance alone, three factors are more important. The rationality and fluidity of safety and return. For example, whether a financial product is safe or not, whether the profit is reasonable, whether the interest of borrowing is a reasonable cost structure, if it is unreasonable, the loan itself will not support. Again is the liquidity, the platform to throw in, whether has its own ability to mention, many platforms provide the function of conversion.

From the end of the Internet, the product is comfortable to use, is not a day to see the benefits, is not very good management of the money, there is not enough capacity, resources to constantly understand the situation of this platform, whether the establishment of a very good social groups, through the channels of third parties to understand platform information, These are things that can increase experience and trust through a very thin internet.

In different periods and in different modes, these factors are sorted differently, and the security of the present stage is ranked first. The most important thing is people to do, or will fall to the team, all the embodiment of the team is the embodiment of ability. The building block box has a very complementary, strong team, their ability is embodied in the site experience, product design, sincere and transparent positioning, daily disclosure of all aspects of information.

Peer-to-peer industry still in happy enclosure

Internet finance, Peer-to-peer, half the sea, half the sun. At the same time face a larger market demand. The other side has a lot of negative news. The industry is still in its early stages and should not be more than 100 billion. Compared to the opportunities visible in the market, the situation is now as if some people in the desert are running in all directions, and there is a time when they may not meet, and everyone needs to adjust their pace. Now the more important competitive point is how to serve the customer.

Industry basically presents a comparison of the state of aggregation, although there are nearly 1000 platforms, but most of the business is clustered in a small number of platforms, this small number of platforms will eventually run out, due to different modes, wind control methods, different positioning, there may be some changes.

Now run faster in the industry, the model clearer clean platform, are still located in the Internet, have not made money, are in the investment, how to expand the platform is the most priority. Everyone is in negative profit growth, and the offline platform may have a higher margin. is now basically in the stage of happy enclosure.

Compared with traditional finance, we are now in a period of crazy growth, the number of platforms is very large, but not mature in all aspects, mortality rate than traditional financial institutions are higher. But internet finance will explode, and find some sustainable, rapidly scalable models, much faster than traditional financial institutions.

The core strategy of Internet finance is the data

The ultimate core strategy of online finance is reflected in the data, in fact, if the bat aside, there is no one is the data for the king, there is no healthy ecological system to produce data, more or less in the relatively thin user experience phase, to enter the data phase is a run-off, a year later will appear in such a decisive victory.

China's credit system is relatively underdeveloped, which is also an opportunity for pain points. China is an era of many entrepreneurial teams and very hard work. I'm sure there will be good teams and companies out there, and the block box may be one of them.

A more interesting logic, the early stage of the electricity business through the flow of information and logistics to get through the flow of money, financial flows may also be through such a market to get through the flow of information and logistics, this is a common logic, to see which one can find the right model as soon as possible.

Do a good job of each stage pattern

The choice of Peer-to-peer this model requires a certain amount of ability and resources, because close to the transaction, so the risk is greater, responsibility is also greater. At this stage, we mainly in the group and market these two directions, to quickly accumulate flow, need to have enough customers and good enough service to do support.

For the future direction of development, we certainly have to consider, but we need to do a good job in each phase of the model. This phase of the model is how to put the risk controllable to a sufficient number of items on the platform, risk controllable, service both ends. This thing itself needs a lot of input, this advantage will eventually appear, we at both ends can get what valuable customers. The financial services they can enjoy are more than just borrowing and lending.

Our current project sources, mainly two, the vast majority of the channel from their own development, followed by the cooperative guarantee Company recommended. Guarantee Company for our model is a supplement, the vast majority of business from their own channels to open up. For the next step how to find a good financing enterprise, our logic is very simple, China has a lot of small and medium-sized enterprises, but SMEs are through the up and down or larger enterprises to generate transactions, we go to large companies to cooperate in the supply chain to find the financing needs of SMEs. Finish)

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