Security is not a major constraint on internet finance

An official letter poured cold water on the already thriving internet finance, "the People's Bank of China to pay the settlement division on the suspension of payment Bao company line bar code (two-dimensional code) payment and other business views of the letter" not only stopped Alipay and Tencent's virtual credit card products, but also suspended Alipay, Tencent's two-dimensional code to pay, the reason is security doubt. The so-called security is actually two dimensions of the problem, one dimension is financial risk, one dimension is financial crime.

In the dimension of financial risk, as long as there is the financial transaction activity of the banking industry, the existence of financing in the securities market, the existence of insurance business, the change of asset price, or the existence of financial risk, the existence of financial risk is the inevitable of economic activity. This is not necessarily related to whether financial activity is done on the Web or on the counter. The internet itself does not provide innovative financial services, but only through the use of Internet technology, mobile communication technology to achieve financial intermediation, payment and information intermediary services such as the emerging financial model. In this model, the risks faced by internet finance are the same as those of traditional finance.

In the financial crime dimension, because the Internet coverage of the crowd more extensive, but also more secretive, at the same time for ordinary users only the network interface is visible, behind the interface is a black box, there may be insecurity. This is the inevitable problem of the development of efficiency type technology. Just like the invention of ATM machine let a part of the financing from the face-to-face communication between people, become the interaction between people and machines, the beginning will encounter black box and distrust, ATM machine generated by the ATM machine based on fraud. In the face of this kind of financial crime, on the one hand, technical counter system is needed, on the other hand, the normal financial crime blow. This is necessary to improve in the process of practice.

It is clear that halting Internet financial services from a security perspective is not a strong argument. The more important reason is the impact of Internet finance on the existing financial system. Financial products rely on the internet to break through the boundaries of time and space, this is now the general physical outlets do not. In the history of financial development, the invention of ATM can be considered as an epoch-making creation, ATM is to minimize the space and time limit in the physical level. Financial products are trading behind, transactions need to pay transaction costs, including trust, institutions, payments, time and so on, the Internet runs through all relevant links. The financial model relying on Internet can produce huge benefit, can achieve the same resource allocation efficiency as direct and indirect financing now, and reduce transaction cost greatly while promoting economic growth. More importantly, in the Internet financial model, now the division of Finance and specialization has been greatly diluted, by the Internet and its related software technology replaced by the more popular market participants, the Internet financial market exchange caused by the enormous benefits of ordinary people.

The bank's traditional retail business focuses on consumer finance, for example, credit cards, personal finance, and so on, our daily contact with the Business Hall Services, ATM, online office and other businesses are personal business, with the broadest group, but this is not generally the center of the banking business, its focus is mostly on the non-retail business-deposit and lending. In the field of lending, banks favor big customers, large customers have high borrowing, can effectively spread the services and wind control costs, so the bank attaches great importance to customers, small micro-customers are particularly ignored. It is very difficult for individuals to get loans from banks, which is why Internet financing loans can grow fast, and the Internet can serve small, micro clients that banks are unwilling to serve, the most widely targeted group of internet finance.

Usually a service, product, technology, system can provide high ordinary people's well-being is called progress. Can believe that one day the currency will be completely digitized, even in the form of Internet money, the Internet currency can not be the entity's currency, users in the network credit, behavior can accumulate Internet money for themselves, can form a substantial purchasing power. This should be the higher order state of internet finance. By this day, not only are existing commercial banks, insurance companies, securities firms, and even central banks also hit, because internet companies themselves can issue buying-power trading media, whether it's money, Internet money, credits, user credit, or whatever, This may be the reason why Internet finance is constrained (Shenlu).