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The application of online finance has gradually expanded

Source: Shangpin China | Type: website encyclopedia | Time: September 28, 2014
Due to the development of science and technology, some things related to the network have emerged continuously, such as: Website Design , network finance, network securities, etc. The popularization of network finance application can show that in the development of modern financial industry, financial transactions and financial services are more open; Open financial transactions and services also affect the development model of financial institutions; Information asymmetry in financial market gradually moves towards relative information symmetry; The big financial pattern will take shape. All these, in turn, promote the further expansion of the application of online finance, which is the overall direction of the future development of the economic and financial industry.
 

(1) Openness of financial transactions and services. At present, global economic integration and financial capital integration have an impact on people's production and life. The international financial industry competes and depends on each other. The continuous development of network information technology has triggered a fundamental change in the concept and mode of financial information services, and has also driven the growth of demand for financial information services. In the financial field, information services have included all core businesses. The foundation of financial innovation is inseparable from the continuous development and progress of information technology.

It is generally believed that the purpose of financial innovation is to improve the level of financial services. In reality, the priority of economic entities enjoying financial services in the financial market when choosing financial services is increasingly shown as shifting from financial institutions with low transparency to service institutions with high transparency. This will inevitably lead to openness in the process of financial development, which is an inevitable trend to improve transparency in industry competition. Transparency refers to the amount of information actively provided to the market, the level of transaction fees charged, the variety and convenience of services, and the way and channel of services. In general, the transparency of commercial banks and insurance companies is relatively low. Mutual funds, investment fund companies and other institutions belong to semi transparent institutions, while the securities market belongs to transparent institutions. The substantial reduction of transaction costs and the increasing variety of transactions in the financial market will attract more financial transactions from traditional financial institutions, The development of online finance has adapted to the demand for open transactions and open services.

In a deep sense, the development of the application of online finance is rebuilding the traditional financial institutions, which has a far-reaching impact, including the qualitative aspects of the development model of financial institutions and the reduction of transaction costs and expenses of financial institutions. The openness of online finance determines the change of the development model of financial institutions, That is, from the traditional face-to-face service mode to the open group participation and interactive communication service mode. For example, in March 2000, Hong Kong launched a financial service for mortgage. Residents who need to apply for housing mortgage can put forward their own mortgage requirements through the relevant website, and the bank will propose preferential terms to win over each customer. Customers can enjoy the lowest loan interest rate without spending manpower and material resources to run around the banks. On the other hand, the requirements of the openness of online finance for online financial services can be simply summarized as: providing financial services in any way at any time and anywhere. Obviously, this requirement can only be realized gradually through the network platform, which also forces the traditional financial industry to carry out large-scale adjustment. To be specific, in a larger scope, financial institutions should use and rely on the network to expand financial business to a higher degree, and this financial business must be comprehensive, that is, "big financial" services covering banking, securities, insurance, wealth management and other fields.

(2) Changes in the development model of financial institutions. In the application of network finance, the transaction costs and expenses of financial institutions will be further reduced. Transaction cost is a key factor affecting the development of financial institutions. In the traditional financial system, due to the high transaction costs, investors with less capital will not be able to participate in the investment of financial institutions; Even if it is possible to invest, it cannot be properly decentralized. The reason for the existence of financial institutions is that they can reduce transaction costs and make it easier for financiers, financiers and investors to communicate and effectively allocate financial resources such as funds through the professional use of financial institutions. It is generally believed that there are two main methods for financial institutions to reduce transaction costs: one is low cost of scale, that is, with the expansion of transaction scale, the transaction cost of each unit investment decreases, and the transaction cost of a single investor is greatly reduced by pooling the funds of many investors; The second is specialized division of labor. That is, different financial institutions should establish specific service fields, develop financial service products that meet customer needs, and reduce the transaction costs of financial services on a large scale through specialized division of labor. If online banking business is carried out, a website may be a large-scale branch, which reduces the operating costs and expenses. In fact, the network economy has provided greater growth space for the development of the financial industry. Through network information technology and means, financial institutions can conduct large-scale transactions at extremely low unit transaction costs, changing the traditional banking business model from the face to face.

(3) The financial market tends to be information symmetric. In modern financial theory, information asymmetry in the financial market is an important reason for the existence and competition of financial institutions. For example, in the traditional financial market with underdeveloped network economy, one side of the transaction does not fully understand the other side of the transaction, which affects the correct financing decision, thus leading to the most active traders seeking loans may be the most likely defaulters, and some traders obtaining loans may risk loans in the name of financial institutions. Although banks and other financial institutions know all kinds of information about financiers and investors, these information cannot be sold publicly. Therefore, this unique information advantage of banks and other financial institutions makes them become intermediaries that can effectively solve the information asymmetry in the financial market.
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