Covering ‘last mile’ of credit service
TECHNOLOGY will play an indispensable role in covering the “last mile” of delivering financial services to parts of the world without banking.
Eric Jing, chairman and chief executive of Ant Financial, the financial affiliate of e-commerce giant Alibaba, said his company had employed technology to lower the bar for small and medium-sized enterprises to obtain credit.
The exponential growth of e-commerce and mobile payment over the years has connected people in the remotest corners into a vast global network of commerce, Jing said.
“Even an old lady making cloth shoes in rural China can now sell her products online,” he said. Thanks to the increasing fusion of online and offline data, companies such as Ant Financial can now create a credit profile for each user, ranking them by creditworthiness. Such profiles have become the reference in banks’ decision-making process.
One of the credit-rating programs adopted by Ant Financial 310 allows users to submit applications for loans in three seconds and approves them in one second, with zero human intervention throughout an AI-enabled process.
Bei Duoguang, co-chair and president of the Chinese Academy of Financial Inclusion at Renmin University of China, said services provided by companies such as Ant Financial have given an impetus to the development of inclusive finance in China.
“China has emerged from being a relative latecomer in this sector to a vanguard and even a world leader,” said Bei. He added that digital technology has made it possible for people to gain access to credit without collateral.
He said inclusive finance should become a multi-layered ecosystem, where all the players will develop different roles for themselves rather than compete against each other.
“Banks and non-banking institutions like fintech companies should have different positioning and work together to achieve synergies,” he said.
“What matters is how banks will support or cooperate with these fintech firms.”
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