The Way Striving To Internet Finance For The Traditional Chinese Banks

In 2015, the internet finance made a fabulous progress in China with abundant product innovations and the brand-new supplementary regulatory guidance by ten ministries. Meanwhile, not only are the traditional finance enterprises using more and more internet tools, but also all kinds of internet companies including the productive ones and the real estate agents begin to step into the internet fiancé field and offer financial services. Based on a new business model in finance, this paper differentiates financial internet represented by financial institutes using internet tools and internet finance depending on clouds calculation and big data to provide financial services. It finally concludes that the essence of internet finance is “financing” by both traditional financial institutes and internet enterprises, taking risk management as crucial.This paper testifies the inevitable trend of the traditional commercial banks transformed from utilizing internet tools to making use of big data. As a new thing, internet finance is focusing on the basic functions of fiancé such as investment, financing, payment and information intermediary etc., and is doomed to be further developed. Through comparing the product innovations, channels and regulations, this paper draws a conclusion to absolutely solve the risk management problem, and accurately grasps the enterprises’ demands and credit situations for the sake of the real enterprises’ demand-oriented financing. Being confronted with the slow-down economy during China’s New Normal, the banks who refuse innovation will be out of the game.With the case study to Z-bank, this paper gives clues to its internet finance transformation by introducing its general situation, business model and profit-making ways. It makes analysis from both the positive and negative sides with Z-bank’s transformation strength and potential problems, and arrives at the conclusion that Z-bank’s transformation should not only be a model but also be further improved with its risk management ways. In the meanwhile, this paper states both the challenges and opportunities under the internet plus background. Following the example of Capital one in USA and m-Bank in Poland, and learning from their community banking experiences, diversification and direct banking examples, the paper points that internet plus has launched a tremendous innovation to the traditional banks and puts up suggestions that the whole industry should probe into the internet finance with an array of various internet products to make innovations. That is basically counted on the service, the business, the product, the platform, the risk management and the organization, making the customer demand first, and absolutely solves the risk problems through internet big data seizing the demand and credit situation. In this way, it is better for them to finally strive for a sustainable business operation. The transformation isn’t an individual promotion, hence the paper also gives suggestions for the present finance regulatory system in which there exists chaos for internet finance cooperating with some P2 P platforms. Last but not the least, the paper initially puts up a brand new risk management model, which is based on the actual trading data, making big data analysis, and is finally rewarded with the precise customer financing demand either in loan or in investment. Being replicable and easy to spread, this new model becomes a good choice for the traditional commercial banks.In the end, the paper shows the traditional banks a way to internet finance and gives expectation for its future development. At the same time, it makes a short explanation due to the author’s imperfect knowledge on internet finance. To sum up, this paper expects a further refinement for the internet finance theory and actual practice to make new guidance for the new finance business model.