The Case Study Of Hengfeng Bank's Fund Depository Business For Online P2P Lending Platform

In recent years,the supervision of the P2 P industry has become increasingly strict.Owing to various regulatory policies having been published,the development of the industry tends to be standardized.Among the tasks of regulating P2 P lending platforms,the capital security is the most important.As for commercial banks,they should actively lay out the fund depository business,and give full play to their risk guarantee function under the requirements of regulators,so as to alleviate the negative impact of the financial security problems existing in the P2 P industry.Payment & Clearing Association of China(PCAC)officially released the annual operational report on May 2016,in which the operational mode of Hengfeng Bank's fund depository business for online P2 P lending platform has been included to be the only case study about online fund depository business.This operational mode has been acknowledged as Hengfeng Mode in internet finance circles.The key idea of Hengfeng Mode is the platform finance.The bank can obtain additional clients in large numbers through the online P2 P lending platform,providing with account and capital service together with the third party payment platform.Therefore,not only the bank could have access to accumulated capital from online P2 P lending platform and excess reserves from the third party payment platform,but also the main trouble in the internet finance industry would be solved.There has been quite a win-win situation where the safety of individual client' capital has been guaranteed and the bank can get additional deposits and intermediate business income.On February 2017,China Banking Regulatory Commission(CBRC)published the guidance on online lending fund depository business.The P2 P fund has been forbidden to let the nonbanking institutions get involved.That is to say,online lending fund can only be deposited in the commercial banks.The Hengfeng Mode was prohibited in China from then on,that leads to a sharp decline in the competitive power of Hengfeng Bank in the fund depository business.In order to maintain the market share of the fund depository business,Hengfeng Bank timely upgraded the fund depository model and actively promoted the business revolution.However,the results are not as good as expected.Therefore,the case study of Hengfeng Bank's fund depository business for online P2 P lending platform possesses important practical significance.In the process of developing fund depository business,how to make full use of other resources,to grasp opportunities and to create new competitive advantages is the key topic of this paper.Besides,the content of this paper is not only the cooperation between commercial banks and P2 P lending platforms,but also the cooperation and innovation among the whole financial industry in the future.From the view of the author,in order to develop fund depository business,the commercial banks could choose to cooperate with other financial institutions and non-bank financial institutions,to improve efficiency of examination and approval of P2 P lending platforms and their customers by accelerating the construction of cloud credit reference system,so as to promote the healthy development of the P2 P industry,as well as the whole financial industry.Following with a brief introduction of the background and significance of this topic,this paper firstly analyzes the innovative operational mode on joint fund depository business of Hengfeng Bank and ChinaPNR,as well as its later enhancement and development,by the method of analysis of cases.Secondly,the advantages of Hengfeng Bank and the exited problems during the developmental process of fund depository business are concluded,by the method of comparatively research.Furthermore,the causes of those problems are introduced in details.Finally,five suggestions are put forward for the future development of Hengfeng Bank's fund depository business from the points of information sources,technology development,setting standards,multi-cooperation and shared experiences,after the study of the Hengfeng Bank in an all-round way.As for the innovation of domestic P2 P lending platforms' operation mode,the author of this paper proposes that the commercial banks can play a greater role by further cooperation with the P2 P lending platforms after the mature development of the P2 P fund depository business.In addition,based on the universality of the problems existing in the Hengfeng Bank,the suggestions presented in this paper also own great reference significance for other commercial banks in the industry.