High quality customers of real finance will be nibbled by online loan companies sooner or later

Internet credit based on big data can achieve a lower non-performing loan rate than traditional financial institutions, thus providing lower loan interest rates and reducing the financing costs of borrowers? There is no doubt about that. But at present, the overall scale of domestic online lending is too small, and it is distributed on hundreds of platforms. The real arrival of the era of Internet credit big data may wait until the day when the balance of industry loans exceeds 10 trillion.

In fact, even if we use the same risk control model as traditional financial institutions, online credit can also do better in risk control.

Let's take a look at the business expansion model of traditional commercial banks: banks are based on Website production If you want to expand your business in a new region, you must set up a branch. The population, enterprises and economic conditions around the outlet determine the business structure of the outlet.

We assume that the head office of a commercial bank has developed a three-year personal consumer credit product. Past data show that civil servants and teachers aged 30-40 have the lowest probability of default, while others have a higher probability of default. Assuming that the distribution target set by the Head Office for this product this year is 5 billion yuan, it would be most cost-effective for local branches and sub branches to give all the 5 billion yuan quota to civil servants and teachers aged 30-40 years old. The problem is that due to the geographical restrictions of branches and sub branches, it is difficult to have enough civil servants and teachers within the jurisdiction of the branch to absorb the 5 billion yuan quota. At this time, in order to complete the sales task, each branch and sub branch must promote this product to other people, and the final customer composition will include various occupational groups.

This phenomenon often occurs in the process of banking business development. For example, a branch's local pillar industry is steel manufacturing, which accounts for more than 80% of the local output value. Suddenly, the steel manufacturing industry has a downward trend, while the branch has more loan balances in the local area. At this time, exit is the wisest choice for banks. However, if the branch withdraws completely, it will lose most of its income and deposits, showing negative growth in business, which is unacceptable for the branch. In the end, even if the risk is higher, the bank still has to maintain credit to local enterprises, or at least slow down the pace of its own exit from the industry.

2、 Even based on traditional risk management means, online lending can still achieve better risk control

Returning to the above example, assuming that the individual consumer credit product is developed by an online credit company, the company can push the same 5 billion yuan credit line to civil servants and teachers aged 30-40 across the country. Because the default rate of this group is the lowest, online credit companies can obtain higher profits than banks under the same execution rate, or execute lower interest rates under the same yield rate, further expanding their market share.

In terms of corporate credit business, online loan companies have more room for customer selection than real financial institutions.

Suppose that a certain type of customer is defined as a "basic maintenance" customer in the credit policy formulated by banks and online loan companies this year.

When real financial institutions re credit basic maintenance customers, due to geographical restrictions, they often re credit the enterprises they have served before. Online loan companies without geographical restrictions are much more flexible. Online loan companies can give priority to allocating limited credit resources to those customers with the highest profit rate, the strongest operating net cash flow, or the lowest asset liability ratio, thereby reducing their own risks.

From this we can see that, If the real financial institutions do not make changes, their best customers may be eaten by online loan companies in the market competition. Once online loan companies gain data accumulation in the expansion of market share, this competitive advantage will be further expanded.

In fact, there is no boundary between real financial institutions and Internet banks. Traditional commercial banks can also engage in Internet business. However, each Internet service will eventually form an oligopoly, or only a few enterprises will compete with each other. Are we about to see real financial institutions and Internet companies fighting on the battlefield of online banking?