—— After going through a period of barbaric growth, frequent risks, and tightened supervision, the online financial industry is now facing changes, which also means the emergence of transformation opportunities.

In recent years, while the Internet Finance industry has flourished in China, it has also produced some chaos. The constant exposure of risk incidents has made everyone talk about it. It seems that Internet Finance has become a synonym for “P2P to make money and run away.”

In view of this, the State Council recently organized 14 ministries and commissions to hold a video conference, which will launch a one-year special rectification in the field of Internet finance across the country. Public opinion believes that this move will help create a more mature and standardized industry environment.

With the upgrading of supervision, another view has begun to emerge, that is, the Internet finance industry may “step into the winter.” Those who hold this view believe that the current life of Internet financial platforms is difficult, and it is increasingly difficult to raise money. The data also shows that in the first quarter of this year, nearly 100 P2P online lending platforms voluntarily shut down. However, this view misunderstands the relationship between regulation and development, and the government’s rectification of this industry is not the so-called “suppression.” This year’s “Government Work Report” mentioned Internet finance, and the core word was “standardized development.” Standardization is for better development, standardization is the prerequisite, and development is fundamental.

In fact, scanning the status quo of the industry can see that while some platforms have collapsed, Internet financial financing has not been cold. Several Internet companies including Ping An Lufax and Suning Financial have announced that they have received huge financing this year. A few days ago, Ant Financial announced the completion of a Series B financing of US$4.5 billion, becoming the largest single private equity financing in the global Internet industry to date, boosting the confidence of the entire industry. It can be seen that the Internet financial platform is still recognized by the market and has reached a stage of development and growth, far from what some people call “stepping into the winter”.

It is not so much that the Internet finance industry is in a cold state, as it is that this industry is now facing changes after a period of barbaric growth, frequent risks, and tightened supervision, which also means the emergence of transformation opportunities. As a supplement to the traditional financial field, Internet finance is characterized by the innovation of financial models and the application of new technologies. Third-party mobile payment, online banking, small and micro loans, insurance, equity crowdfunding, etc., all belong to the category of “Internet + Finance”, and there is a lot of room for Internet technology innovation in these fields. Some Internet platforms are precisely holding the pulse of financial innovation to accurately capture market opportunities. In the future, weak platforms that do not meet regulatory requirements will be eliminated. Without innovation and transformation, there is a risk of being eliminated, and the survival of the fittest is the inevitable necessity of the healthy growth of the Internet finance industry and the need for sustainable development.

At present, the new normal of my country’s economic development requires intensified supply-side structural reforms, which provides opportunities for the Internet financial industry to play important services. Serving the overall situation of supply-side reform, the Internet can make finance better connect the industrial and commercial fields, benefit thousands of households, and serve the national economy and the people’s livelihood. For example, through the support of big data, it can help producers to effectively supply, accurately match demand, and play a positive role in digesting inventory and production capacity. In the process of entrepreneurship and innovation, the funding needs of some small and micro innovative entrepreneurs are often ignored by traditional financial institutions. Internet finance can provide financial support for these innovative and entrepreneurial activities and realize the precise connection between financial assets and needs, thereby satisfying innovation. The capital needs of entrepreneurs. Internet finance can play an important supplementary role in supporting investment in agriculture, rural areas, and farmers and targeted poverty alleviation.

The Internet will not subvert finance. It is not an antagonistic relationship with traditional financial institutions but complements each other. In the context of strict supervision, the government cannot ignore its support for Internet finance. Strict supervision does not mean adding unnecessary thresholds, and the policy of streamlining administration and delegating power to support the growth of small and micro enterprises will not change. Serving the overall situation, facilitating economic transformation, and benefiting the people’s livelihood are the right path for the development of Internet finance. Industry rectification does not mean the arrival of the cold winter, but it means that the spring of Internet finance has really begun.

Cheng Yang


April 28, 2016, 4:17 a.m.

Source: People’s Daily Online; People’s Daily; April 28, 2016, Version 05