Ping An Bank’s Vice President Cai Lifeng: Consumer finance offers new opportunity to the financial industry

Time: Oct.9 2016 Author: Ping An of China [Size：largemedium small]

'Under the new normal of economy, with the acceleration of interest rate marketization and the evolution of disintermediation trend, the market environment is changing; the consumer finance business, with its advantages in 'weak correlation with the business cycle' and 'anti-disintermediation', becomes an inevitable choice for banks to achieve a strategic transformation and sustainable business development', said by Cai Lifeng, Vice President of Ping An Bank (PAB) in her speech of 'How Can Banks Enter the New Blue Sea of Consumer Finance' at the first consumer finance summit of China (Shenzhen) sponsored by hexun.com on Sept. 23.

Consumer finance presents new opportunity, with a short time window
'2016 will be a red-letter year in the development history of consumer finance in China.' As pointed out by Cai Lifeng in her speech, the central government has issued a series of positive policies. For example, Premier Li Keqiang encouraged financial institutions to develop innovative consumer loans in his government work report; the executive meeting of the State Council in June decided to remove controls over the consumer finance market access and promote consumption upgrade. All this injected strong power to the consumer finance industry.
At the same time, with the rapid development of China's economy, the take-off of new-typed internet economy and the growth of a new generation of consumer groups, people's consumer finance demand is increasing. According to the forecast of third-party institutions, China's consumer credit size will maintain a compound growth rate of more than 20%, and will amount to RMB41.1 trillion by 2019. A great industry blue sea is gradually emerging.
In addition, with the development of information technology, the accelerated integration between the internet and various industries is changing people's mode of production, lifestyle and ways of understanding the world, and creating new industrial forms and business landscapes. The increasing popularity of internet finance is exerting a dramatic impact on the financial operation means and ecological environment. Financial services penetrate deeply into people's daily life and change people's consumption custom. Consumer finance is springing up.
'Based on great market potential and demand, under the support of policies and information technologies, the consumer finance industry will embrace unprecedented development opportunities.' According to Cai Lifeng, opportunities tend to coexist with challenges. With the deepening of financial reforms in China, there will be a significant increase in financial institutions participating in the market competition. Consumer finance companies and internet enterprises struggle to take a share of consumer finance, and the market competition becomes increasingly growing and diversified. 'The new blue sea will turn red soon, and the opportunity full of attractiveness leaves us little time', as summarized by Cai.

Integrated finance, smart consumption and easy availability of credit open up a new blue sea of consumer finance
Great market opportunities and cross-sector fierce competition make heavier demands on commercial banks' strategies in the consumer finance area.
As said by Cai, being a financial institution integrating innovation genes and technological strengths, PAB is customer-oriented and all-inclusive, learns widely from others' strong points, adopts cross-platform product sharing and innovation, leverages fintech strengths, builds differentiated consumer finance business models, advocates the value position of 'integrated finance, smart consumption and easy availability of credit', and creates first-mover advantages to enter the new blue seas of consumer finance.
Specifically, PAB's consumer finance focuses on the financial demand in five scenarios of 'health, food, housing, transportation, and entertainment', builds a 'cherry-picked' product platform by partnering with Ping An Group's subsidiaries like Securities, Insurance, Trust, Asset Management and Fund, in a bid to achieve cross-sector innovation in products, and create a unique product line integrating with five life scenarios and ecosystem chains.
Take the 'real estate ecosystem chain' for example. For housing mortgage, PAB launched E-mortgage featuring online application and rapid review. For customers with large consumer loan demand, PAB launched mortgage-backed 'ZhaiYiTong' to offer revolving loans by one-time application. In addition, PAB joined forces with Ping An Property & Casualty to introduce real estate guarantee insurance so as to shorten the mortgage process, enable quick disbursement, and gain outstanding competitive edges. Through online application, efficient review and guarantee insurance-supported quick disbursement, PAB provides customers with quality services characterized by '2-day review and 7-day disbursement', showing a significant improvement and breakthrough when compared with the turnaround time of 1.5 months-2 months for mortgage loans and 21 days-1 month for secured consumer loans in the traditional model.
The ultimate destination for consumer finance is users. Cai Lifeng specially presented the 'O2O+T' service model that PAB pioneers to improve customer experience. This model integrates Ping An Group's online and offline advantages, coordinates efforts of different channels, and solves pain points and problems in customer services, so as to fully improve customer services. Take PAB's 'XinYiTong' for example. Customers can apply for the service online quickly if they have such demand. PAB's telemarketing representatives will follow it up promptly, and customers can also make an appointment with the nearest outlet to their home to receive relevant consulting and professional services. After the credit facility is granted, customers can withdraw revolving loans via online banking and microphone, and the loans can arrive instantly.
In addition, PAB has made a preplan for internet finance to enable available consumer finance services in any place at any time. According to Cai, the rule of 'openness, sharing, freedom and rapidness' is followed in the mobile internet area. PAB launched mobile portals of 'Pocket Bank' and 'Orange E Platform' and built the consumer finance portal on the mobile platform of the Group's subsidiaries to enable 'easy availability of credit'. In addition, being a giant in the consumer finance industry, PAB leverages big data to integrate customer and business resources, engages in data mining and online marketing, and continues to improve the smart big data risk management system adapting to the internet + ecosystems so as to enable individuals and businesses to have access to useful and affordable financial products and services that meet their needs.
'The consumer finance industry in China is facing a comprehensive upgrade and reform; the new blue sea of consumer finance is a great dream of Ping An Bank, and also brings a better life to each customer of Ping An.' Cai indicated that Ping An Bank will give into full play its advantages to become the most reliable consumer finance service provider for customers.