Forbes Asia August 2017

(Joyce) #1
AUGUST 2017 FORBES ASIA | 13

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borrowers and developing the best data
model to provide customized loans to
each loan applicant.
That the Chinese have leapfrogged a
generation of consumer finance is clear.
With spending increasing, credit card use
per capita actually declined from 0.34 in
2014 to 0.29 at the end of 2015, according
to People’s Bank of China. In that same
year, however, mobile payment users grew
65%. By last May, Alibaba’s Alipay sur-
passed cash and become the most fre-
quently used form of payment. Accord-

ing to FT Confidential Research, 80% of
Chinese consumers in first-tier cities have
used Alipay while 79% have used cash.
For the whole year, $5.5 trillion third-par-
ty mobile payments were completed in
China.
Like credit card networks, Chinese fin-
techs are not lenders—they front for affil-
iated banks. But they sweep up valuable
data. The data mills open the way for the
banks to put credit into millions of smart-
phone QR codes.
Mobile payments in turn generate dig-

ital footprints, and technologists are col-
lecting them. Combined with other,
seemingly meaningless data points, they
enable algorithms to predict consumer
behavior, including how likely a purchas-
er/borrower is to make a payment.
In the world of data, this is machine
learning. The electronic brain “learns”
from each loan applicant. Data points
may begin to amass as early as the appli-
cant’s completion of the online form—
say, the number of corrections made in
the application process. (The machine

The Chinese have leapfrogged a generation of consumer finance, using mobile credit and payments.
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