Three basic needs

Fox said: This article biased theoretical research, a bit abstruse, need everyone's patience of taste. This article is mainly to organize their own ideas, but also hope to help everyone.

The hottest topic of the year is Internet finance , which, as a new concept, has no authoritative definition so far. As long as the major media catch the Internet companies to provide financial services, or financial institutions to provide Internet services, the final is the internet finance. Many media people or analysts have their own ideas.

In my opinion, most of them are not fully covered. Relying on the mece principle (mutually exclusive, collectively exhaustive), this article will undertake my previous in Ali and Tencent series analysis of the requirements of the theory, draw the full picture of the internet finance.

The most basic financial needs

From the user's point of view, the Internet finance and traditional finance is not bad, the same is to meet the three basic financial needs of users: payment, investment, financing.

• Payment is the flow of money;

• Investment is money-rich people want to make money (deposit is also a kind of investment);

• Financing is the lack of funds for people who need money, financing is to pay the cost (such as the interest of borrowing and handling fees), in fact, money to buy.

Payment can be independent of investment and financing, self-reliance and self-reliance. Give a chestnut, commodity net purchase payment, the whole process does not involve investment or financing activities.

In contrast, investment and financing are complementary to one another. Investment is a surplus of money to spend money, financing is a shortage of money to buy money, a slap does not ring, a transaction always have the buyer and seller can be successfully reached.

Internet financial products are developed around the three basic financial needs.

Two ways to play in the payment field

The payment process is actually very simple.

The payer uses a medium that has the function of payment means (i.e. currency ￥) to pay directly to the payee or indirectly to the payee through a third party.

Therefore, internet finance should pay more efforts in the field, there are only two ways: to become a third party, or become a medium. Correspondingly, there are two ways to play in this field:

• Online third party payment: to provide users with desktop/mobile end online payment and transfer, payment and other services, such as Net bank payment, Alipay, Tenpay, micro-credit payment

• Virtual Currency: Non-entity currencies that circulate on the network, have price and consumption functions, such as Q-coins, bitcoin

The following focus on investment and financing areas.

Three ways to play in the field of investment and financing

Before we know three ways to play, we have to look at the whole process of investing and financing.

The above diagram is the simplest investment and financing process. A surplus person gives money to a person who is in short supply, and then returns the principal and the return on investment (or loss ...). (Arrow only indicates investment capital flow direction)

Traditional financial institutions, often referred to as financial intermediaries (Financial intermediates), are responsible for providing liquidity to financial markets. Banks, for example, have cash surpluses that deposit money in banks to earn interest, banks to cash in, and financiers to pay interest.

Traditional financial institutions, though called financial intermediaries, are actually included in the simplest models. Take the bank as an example, the traditional financial institution is the role of the fund shortage in the transaction of the surplus person's deposit. The traditional financial institution is the role of the fund surplus in the transaction of financing loan of the fund shortage person.

On the basis of the most basic process of investment and financing, sometimes because the information is not smooth, need to participate in the third party outside the investment and financing to facilitate the matching of supply and demand information, the completion of investment and financing activities.

In addition, investment and financing activities also suffer from systemic risk (systematic disorientated), influenced by many market factors, such as politics, economy, society, technology and industry itself. This information will also lead to investment and financing activities.

Some people may wonder whether traditional financial institutions belong to the third party in the above picture. Here Fox can further explain the role of the third party in the investment and financing process

The third party does not deposit or lend, only as the matchmaker matchmaking and financing both sides, the investment and financing parties are clearly know their contract party is who. From this perspective, the so-called Peer-to-peer lending platform with a pool of funds is not a third party, but a surplus or shortage of funds.

Traditional institutions may also be third parties: for example, a bank to sell funds products, fund companies are short of funds, retail investors are surplus, the bank is a third party. In terms of financial banking, a third party is only a "channel".

Clear the whole process, naturally know the investment and financing areas of the three kinds of play-owned products, financial services intermediary and information supply and analysis.

In the process of investment and financing in the absence of the third party, its own products are the main play of internet finance. There are two main modes of

• Electronic platform for financial institutions: an online platform set up by financial institutions to provide both investment products and financing products, such as electronic banking and insurance net sales

• Internet/electric Business Small loan Company: the use of Electronic business platform to collect transaction data, so as to tap the financing needs of online merchants, and the use of large data to control credit risk, small loan business, such as Ali small loans

As for the financial services intermediary, I draw the investment and financing process map of the "third party" play. A third party is connected to a personal/non-financial institution, and the other end has "docking financial institutions" and "docking of individual/non-financial institutions".

There are three main types of docking financial institutions:

• Electric business Platform supply chain Finance: the electric business platform and the bank cooperation, provides the supply chain financial service for the electric business platform supplier, like Jingdong Mall, Suning buys and the bank cooperation. Some time ago, it is possible to remember the cooperation with CITIC Bank as a derivative of this way.

• Financial Flow distribution: According to the user's financial needs, matching the financial institutions suitable for customers (currently covering loans, credit cards, financial products, etc.), such as 360, good credit network, I love cards, Baidu loan search, 24 wealth

• Financial Products Sales Platform: Users can buy directly on the Internet funds, insurance and other financial products, investment and financial management, such as Taobao Fund/insurance shop, Tencent Financial supermarket, every day fund network, Copper Street, and so on, the most famous balance treasure is only one of the varieties

There are two main types of docking individuals and non-financial institutions:

· Peer-to-peer Lending Platform: connecting individuals with investment needs and individuals with financing needs to achieve financial desorption, such as Lu Jin, Pat and loan

• Public platform: financing needs of individuals/institutions can be launched in the public platform projects, to buy or pre-sale of the way to raise project funds, such as roll call time, the public network, chasing dream nets, everyone cast and so on

Finally, the third way to play in the investment and financing field-information supply and analysis. Players in this field provide timely and effective information and analysis to customers to facilitate investment and financing activities, such as Bloomberg, finance portal, Tencent Trader, I stock and so on.

A lot of long-winded, nature is to a picture summed up: