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FinanceAnt Group to share consumer credit data with China's central bank

Ant Group to share consumer credit data with China’s central bank

GUANGZHOU, China — Ant Group will share credit data from its consumer lending enterprise with China’s central bank as a part of an overhaul of the fintech large.

Huabei is a consumer mortgage product beneath Ant Group. Data from that lending product shall be fed into the monetary credit info database held by the People’s Bank of China (PBOC), Ant stated in a press release Wednesday.

Information together with date of account arrange, quantity within the credit line and standing of reimbursement shall be supplied to the central bank. Users will want to authorize this. Specific info akin to particulars about time of purchases or items being purchased won’t be handed over to the PBOC.

Ant Group, which is managed by billionaire Alibaba founder Jack Ma, had its blockbuster preliminary public providing suspended in November over regulatory considerations.

Ant’s lending enterprise labored on a mannequin wherein it matched up debtors to lenders, akin to banks, however the firm didn’t underwrite these loans. Instead, banks bore many of the danger.

This fearful regulators who believed firms like Ant have been performing like monetary establishments however not being regulated like them.

Chinese regulators ordered a restructuring of Ant Group. In June, the corporate was given the inexperienced mild to function a consumer finance enterprise with outdoors shareholders. This enterprise homes its Huabei and Jiebei mortgage merchandise and known as Chongqing Ant Consumer Finance Co. Ant could have to partly underwrite extra of those loans.

Ant Group is at present within the strategy of turning into a monetary holding firm which shall be overseen by the PBOC and different regulators.

A emblem of Ant Group is pictured on the headquarters of the corporate, an affiliate of Alibaba, in Hangzhou, Zhejiang province, China October 29, 2020.

Aly Song | Reuters

The data-sharing necessities with the PBOC brings Ant Group in line with different monetary establishments within the lending house that are required to do the identical factor.

Ant Group stated some customers can already lookup the Huabei-related data of their credit stories with the central bank.

The firm appears to be like to assuage fears that the sharing of customers’ credit data from Huabei might have an effect on their future potential to get loans.

“A comprehensive and proper set of credit records will enable financial institutions to better understand users’ creditworthiness and to better serve them,” Ant Group stated in a press release.

In my view, this implies the intent is to enable Ant to proceed its enterprise however beneath regulatory purview and guidelines.

“Therefore, under general circumstances and with the normal usage of Huabei and timely repayments, the use of other financial services such as loan applications will not be impacted.”

Kevin Kwek, managing director and senior analyst at Bernstein, stated the credit data-sharing settlement with the central bank clears “significant” regulatory uncertainty round Ant Group.

“Sharing of data of course erodes Ant’s edge, but doing so allows them to obtain regulatory blessings, such as getting the consumer finance license,” Kwek instructed CNBC.

“In my view, this means the intent is to allow Ant to continue its business but under regulatory purview and rules, and if it helps the broader consumer credit bureau agenda. It is important to note that Ant will continue to be dominant as a very large distributor given its user base, even if it now has to share some data.”


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