Research On The Impact Of The P2P Platform's Compliance On Investor's Decision

Under the lack of supervision at the beginning of the development of online loans,most online lending platforms are severely distorted and alienated from the original purely informational intermediary nature.There are many problems in the online lending industry under this development model.The development process has always been accompanied by problems such as illegal fund-raising,money-trapping,capital pooling,and self-financing.A large number of platforms enter the online lending industry while many problematic and failing platforms exit every year.Even if the risk of the borrowing project itself is small,investors' rights will inevitably be damaged when the platform itself has problems.The risk comes not only from the lending itself but also from the platform.As a new emerging industry,the overall development of the online lending industry is not stable compared with the traditional banking industry.Since the introduction of a series of documents and regulatory measures,the regulators have begun to rectify the risks of platform alienation.The development of the platform must comply with regulatory requirements and the industry enters a stage of compliance development.Compliance not only affects the online lending industry itself,but also affects investor decision making.The research of the impact of compliance on investors' decision has theoretical and practical implications for platform development,supervision,and investor decision making.The mechanism of online lending interest rate reflects the factors that investors consider when analyzing risk.This paper considers the impacts of the extent of compliance on investors' decision through its impact on online lending interest rate,selects other factors that may affect online lending interest rate through the risk.The risk from lending project contains credit and other risks.The risk from platform operations includes risks such as fund pools,transactions,and fraud.The above risks are reflected in the characteristics of the lending project and the platform operations.Investors make decisions by analyzing the risks of lending projects and platform operations.Therefore,it is assumed that the lending project and the platform operations affect the investors' decision-making and the online lending interest rate.The characteristics of lending projects include the amount,months,security mechanisms,and offline investigations.The characteristics of the platform include the extent of compliance,capital leverage,technology,transparency,etc.This paper uses online lending rating data to quantify platform characteristics and conduct empirical research.The regression analysis results show that the degree of platform compliance has a significant impact on the online lending interest rate.The higher the degree of compliance is,the lower the interest rate is.That is,the degree of platform compliance is used as an important reference standard for investors when making decisions.Based on this result and the current status of compliance,this paper makes recommendations to the platforms,regulatory agencies,and investors.For investors,the degree of platform compliance is an important basis for investment decisions,but the platform's own risk control capabilities shouldn't be ignored.Investors should improve their ability to analyze risk.For regulators,they should pay attention to maintaining the benign exit mechanism of online lending platform,utilize the role of industry self-regulation,establish an information sharing mechanism,and turn to functional supervision and behavior supervision.For the online lending platforms,when platforms face development difficulties under the strong regulation,they can continue developing through transformation and other means.At the same time,compliance is only the basis of the platform operation.The improvement of operational capabilities including risk control capabilities should not be overlooked.