Whether the Hong Kong net loan Company enters the mainland, can take the Dongfeng of O2O Finance

I recently dug up some stories about people in Hong Kong's traditional industry who have been using the O2O tide to use the Internet. As I have always thought, if the O2O will be the next wave of shocks to the traditional services industry, in Hong Kong and Singapore, where the financial services industry is specialized, it should be possible to see a lot of changes in the business model, or new O2O business to test water.

However, in Hong Kong, I do not see the image of the Cross-border subversion of the Internet that is brewing. Compared with the surging enthusiasm of the domestic trade, the financial industry in Hong Kong seems to be a little too calm, pretending that the upside down in the wall will stay in the wall forever. Of course, the professional culture of Hong Kong, Singapore, the financial industry has always been cautious, it is estimated that a lot of aloof people do not see all the light on the surface of the sudden agitation, especially with China's economic debt risk officially surfaced, Many experts here even suspect that the domestic Peer-to-peer network loan industry may eventually be uprooted fate.

There are, of course, very forward-looking exceptions, such as the founder of the Peer-to-peer Network loan platform welend.hk (Welab) Long (Simon). Simon, who is now a gold collar, quit two years ago as head of the North-East Asia chief of Standard Chartered to start a business as a welab. Recently, he and I have said that we are considering an aggressive foray into the mainland market, and that we have received airborne support from our mainland partners in developing some key cities.

Two years after the establishment of Welab, nearly 300 million Hong Kong dollars have been applied for loans in the highly competitive personal lending market and the number of members exceeding 5000--is staggering in Hong Kong. Welab team size has been maintained at 20 people.

I think, the mainland net loan has been barbaric growth 2, 3 years, Welab now enter afraid too late, moreover this year's systemic risk is not bigger? I didn't expect Simon to answer me. "Big risk, but greater market opportunities." He believes that the next few years will be a healthy development of network loans an important opportunity. "The biggest risk for Welab as a foreign capital is the bottom line, and the government is basically supportive of internet finance innovation after the two sessions," Simon said.

I asked him why he was optimistic about the situation after the establishment of the regulation, he said, referring to the experience of the American Lending Club and Prosper, the development direction of the net-loan company would be this: the initial peer-to-peer approach would gradually mix other models and eventually develop into a new risk asset class. In the United States, many peer-to-peer loans are seen by funds and private investors as an emerging investment tool to diversify risk. Now China's net loan is also developing into this kind of mixed form. Overseas experience has proved that peer-to-peer as a business model, its sustainable operating costs are indeed lower than the private banking sector, Simon therefore estimated that in the future, even if there will be a considerable number of failures, but this is not a bad thing, the fittest will instead of a mature peer-to-peer platform to free more healthy development space.

As we all know, the focus of the long-term competition of the net-loan company lies in the rationality of the wind control design, which is the core of the traditional financial industry. But now a lot of domestic network loan company is responsible for the line wind control team are more "heavy", often hundreds of people. In fact, in the premise of not affecting the quality of the loan, the design of the wind control system should be as far as possible to the line, do data processing, so as to make good use of the advantages of the Internet.

Simon, who has had exchanges with the mainland, seems to think there is plenty of room to compress the cost of the mainland's online staff and to take on the volume of business. He pointed out that at present, the domestic industry lacks to deal with the economic downside risks of combat experience, and in the personal loan industry, no matter how many customers you suck in the early days, and once your cost rate rises due to bad debts, customers will start to lose a lot of money, if the middle of the overturned overturn, the earlier city accounted for a large percentage, will only rats.

Simon pointed out that many people will ignore, in fact, in the economic downturn, the same can expand the market share, but need to adjust the strategy to "win", rob others lost refinancing market. He quoted himself in 2005 in Taiwan Citibank personally overseers "Taiwan card debt Storm" of the battle, the result is that Citi first local opponents step out of the crisis, and in turn to use the crisis to overtake the market share of rivals. The secret, he explained, was that Citi had stabilised the refinancing of 30% per cent of personal consumer loans for financial institutions, adding to the loan, because the cost of the refinancing was minimal, and Citi could thus maintain a competitive interest rate by making others more expensive.

When he led Taiwan's Citibank out of the woods, Simon relied on his own macro-experience of decades of wind-control expertise spanning the credit cycle. Today, he still believes that it is feasible to rely on the professional team to tackle the mainland market. Welab team members have worked with foreign banks such as Standard Chartered and Citigroup, and have extensive experience in wind control of personal loan business. According to Simon, the people who contacted him about cooperation were the bosses of the traditional industry groups in China who wanted to take traditional loans to the Internet to be big and to look for professional partners everywhere.

In my opinion, in the field of Internet finance, which is such a "grounding gas", it may be difficult for foreign companies to compete with local insects with a keen sense of smell, which is also a big reason for their failure. Simon does not deny it, but he believes that the problem of localization of business models can be shared by partners, as is the case with a professionally strong industry such as financial lending, and only if the mainland team is established to deal with localization problems. He is more concerned about whether the market will mature quickly and move closer to foreign trade and trends, and whether this change will be beneficial to foreign-owned enterprises that have foreign control and so on.

Simon predicts that the fund supplier structure of the net loan platform, will be from the original large number of rely on cock silk, gradually to "foreign institutional investors and the rich population accounted for 30%" pattern transition; Once the market structure changes, the original set of online traffic marketing to win the way, and not necessarily on the new admission funds taste, And the elements of team professionalism and data approval are more favored by the management.

This passage reminds me, a few days ago, Hong Kong Credit Suisse held an investment forum, peace Lu Jin and everyone on the platform to speak in the dark, everyone loans slowly rising bad debt percentage, faint perspective of the industry leading bottlenecks. So, if welab this year to cut into the domestic market can be, then I can at least draw a theory, that is: in this wave of services as the protagonist of the domestic O2O tide, Hong Kong professionals do not pick up the domestic market, the entrepreneurial disadvantage, at least hopefully by their own professional advantages to make up.

PostScript：

At the end of the interview, Simon laughs that the biggest problem he faces is the recruitment of domestic offices, it is difficult to find a commercial bank financial talent who can skillfully work with overseas teams, or internet marketing professionals. If the relevant industry readers want to know what Welab is doing, they can contact him directly.