A Research Of China Traditional Banks’ Peer-to-peer Lending Development

The rapid growth of internet technology especially in big data, social network and mobile internet has tremendously changed people’s life. Lots of internet companies have accumulated massive transaction data and record by burning their capital to gain network traffic, mergers and consolidations, and all kinds of marketing activities.Finally an innovative business model-Internet Finance has come out to public, and such massive transaction data has provided necessary basis for its development and upgrade.Meantime, traditional banks, financial institutions and other entities who rely entirely on the loan-deposit interest margin are facing great challenges. Their regular business, like Payment and Loan, are being nibbled by those internet finance company gradually.Due to the popularity of the internet finance concept, a brand new internet+business model- peer to peer lending, combined with internet technology and private lending, has been unveiled. With the vigorous and fast development of the peer-to-peer lending business, internet finance providers have finally invaded the core business of traditional banks-the loan sector. In order to confront the challenge, traditional banks can also establish their own peer-to-peer lending platform to occupy a place in such a gigantic blue ocean of the niche market. Comparing with internet finance providers,traditional banks have more rigorous risk control system, but are short of finance innovations. How to make full use of their own advantages standing on the basis of the internet+ to find out the practical way to develop and operate the peer-to-peer lending business effectively, is an ultimate and unavoidable question to all traditional banks and their related institutions. This article is trying to answer the above critical question based on actual case studies. There are 3 parts below:The first part is a general clarification of how China’s peer-to-peer lending business came out and what the current status is. The factors including the market demand orientation, the big data optimization, financing challenges in small and micro business, insufficient investment channels, etc., have driven the rapid growth of the peer-to-peer lending. However, the inborn limitation of the peer-to-peer lending such as reckless development and loose supervision, might trigger the market crisis.The second part points out the gains and losses during the development of Chinese traditional banks’ own peer-to-peer lending, such as business models, risk controlstrategies, etc. The analysis is mainly based on the comparison among “Lufax ”from Pinan Bank Family, “Ming Sheng Yi Dai”from Ming Sheng Bank Family, and “Kai Xing Dai” from National Bank of Development family, in terms of product features,validity settings, interest rates. The progress of the peer-to-peer lending business of the above 3 banks walks quite ahead of any other Chinese traditional banks in the key fields of the transaction volume, the information transparency and the number of investors.The last part of the article is a bold forecast for Chinese traditional banks’ peer-to-peer lending business platform,which is based on the case studies of traditional and non-traditional banks’ peer-to-peer lending platform. The conclusion might be inspiring to China’s commercial banks who are making their own strategies in the peer-to-peer lending business, also a good reference to related governmental supervision departments during supervision and research, and might be useful to all other internet finance providers. This part arrives at the final conclusion of the whole analysis, but also points out the defects of the article.