A few days ago, JD Finance quietly changed its name from "JD Finance" to "JD Digits". It’s more like the dust has settled, which seems to mean that the de-financialization of the mutual financial giants is irreversible. In fact, Internet financial giants including Ant Financial have previously expressed their intention to "de-financialize" on multiple occasions, and substantial progress can be seen. Why should we give up the city we have captured and play a supporting role, willing to assist financial institutions in providing services? Will this strategic adjustment lead to some new models? Where will the new model ultimately lead? These are questions well worth exploring. Recently, JD Finance quietly changed its name from "JD Finance" to "JD Digits". As a high-profile Internet financial giant, JD Finance has confirmed its determination to change its course in a very quiet way.

It is more like the dust has settled, which seems to mean that the de-financialization of the mutual financial giants is irreversible. In fact, Internet financial giants including Ant Financial have previously expressed their intention to "de-financialize" on multiple occasions, and substantial progress can be seen.

Why should we give up the city we have captured and play a supporting role, willing to assist financial institutions in providing services? Will this strategic adjustment lead to some new models? Where will the new model ultimately lead? These are questions well worth exploring.

General contraction in the general climate

The first to announce that it would not engage in finance was Ant Financial. In March 2017, Ant Financial announced a high-profile positioning shift in Beijing, "In the future, we will only do tech (technology) and help financial institutions do fin (finance)."

JD Finance, which later expressed its stance, denied it even more thoroughly. At the end of 2017, JD Finance CEO Chen Shengqiang said in an interview, “We fundamentally don’t want to do finance.”

This sudden turn of events is not unique to the mutual financial sector. While Internet financial giants have expressed their intention to distance themselves from finance, industrial giants who are also vigorously integrating industry and finance are experiencing similar situations and sending similar signals.

The introduction on the official website of Evergrande Group has long since changed from "Evergrande Group is based on people's livelihood real estate, with finance and health as its two wings" to "Evergrande Group is based on people's livelihood real estate, with culture, tourism, and health as its two wings." For two wings." Finance disappeared as if it had never been there.

In fact, since the start of financial liberalization in 2009, Internet giants and industry giants have almost the same ambitions for finance.

At the 2017 work conference, Xu Jiayin, Chairman of the Board of Directors of Evergrande Group, stated that the goal of Evergrande Financial Group in 2017 is to achieve equity participation and control in banks, insurance, securities, trusts, public funds, Internet finance, etc. Financial license. Also at the annual meeting in 2017, after Liu Qiangdong praised JD Finance’s existing business, he also outlined a future picture similar to Xu Jiayin’s. Liu Qiangdong said, “In the future, JD Finance will not only have these financial services now. Products and services, soon, we will enter securities, credit reporting, including banks. One day we will apply for our own bank, or control a bank, so that we can provide our users with full financial services."< /p>

However, as regulations continue to tighten, these expectations can only be shelved, avoided, or completely denied. Whether it is Internet giants expanding into finance or industrial giants entering finance, although their respective original industries are different, they are all in the same general climate. Therefore, they entered the market at almost the same time and finally left at a similar time.

The complex mentality behind claiming not to do finance

But specifically for Internet financial giants, although they also claim not to do finance, the mentality behind them may be different.

Although Ant Financial has repeatedly stated that it does not engage in finance, the central bank still included it as a pilot enterprise for simulated supervision of large financial holding groups. Being selected as a pilot is no longer a matter of a specific financial business, but in the eyes of regulators, Ant Financial already has systemic importance that affects the entire financial industry.

In this regard, Ant Financial once again emphasized its technical attributes. According to media reports, an Ant Financial insider once made regulatory suggestions, “These products and a large number of cooperative institutions on the Ant Financial platform have no capital relationship with Ant Financial. What Ant provides is technical services. Even a few holding companies have no capital relationship with Ant Financial.” There are no related transaction risks among financial institutions holding shares, and it is recommended that they should be supervised separately from traditional financial holding groups.” According to Caixin reports, some analysts believe that the reason for Ant Financial’s explanation is that Mainly because once Ant Financial is included in the pilot simulation supervision of financial holding companies, under the current background of strong supervision, it is likely to mean that compliance costs will increase significantly in the future, such as the most intuitive increase in capital and strengthening relevant information disclosure. to improve transparency and more.

In contrast, JD Finance is another situation. The financial licenses obtained by JD Finance are far less comprehensive than those of Ant Financial, and as financial supervision continues to tighten, the best opportunity to obtain a license has been missed.

Some people in the industry said that in fact, JD.com has always been anxious about licenses, and it is not inactive in applying for licenses. The main reason is that there are regulatory doubts about its actual capabilities. Therefore, the most valuable banks and funds Waiting for a "big license", but never got it.

When the current situation is unsatisfactory and the way forward is temporarily blocked, transforming into a data technology company seems to be a better choice. According to analysis by Meili Financial Liu Yannan, due to the cyclical fluctuations in the financial industry and the insurmountable growth pattern of financial business, the valuation level of financial institutions is usually much lower than that of Internet technology companies.

After the spin-off, JD Finance has been constantly reported to be "about to be listed separately". So, from the perspective of valuation and listing, it is of course more convenient to declare itself a technology company, although from an operational perspective, it is more convenient. In terms of data collection, JD Finance is still essentially a financial company.

Opening the door to financial institutions

However, regardless of the motivation for de-financialization, we do see that the transformation is already underway.

Internet financial giants are de-financializing and focusing on financial technology. As they themselves say, "empowering financial institutions with financial technology", the specific operation methods that can be seen at present, in summary, are mainly It is the mutual finance giant that opens its own platform, accesses the products or funds of financial institutions, and does some risk control work on its own, or simply plays a diversion role and shares its users with financial institutions.

Ant Financial opened its Wealth Account in June 2017 and invited banks, funds, and insurance companies to settle in, in order to share its traffic with financial institutions. In May of this year, Yu'e Bao also officially connected to the products of other fund companies. In addition to its own Tianhong Fund, there are also currency funds from many other fund companies such as Boshi, CEIBS, Huaan, and Cathay Pacific. This is on its own platform. Products connected to financial institutions.

Ant Financial’s other two credit products, Huabei and Jiebei, have also introduced licensed financial institutions such as consumer finance companies and banks. They are also opening up their own users to allow financial institutions to provide loans. Funds, Ant Financial does risk control, collection and other work in the middle.

JD Finance basically serves financial institutions in the same way. Recently, JD Finance's retail credit platform "Borrowing Money", which has been in internal testing for a year, was grandly launched and was also promoted on the homepage of JD APP. The "Borrowing Money" section is essentially a loan supermarket, which mainly aggregates credit products from licensed financial institutions, including multiple consumer finance companies and banks.

JD Finance’s cash loan business, gold bars, has also introduced banks as partners. At present, it can be seen that in addition to an Internet small loan company under JD.com, the funding parties of JD Gold Bars also include Huishang Bank, Bank of Shanghai, Bank of Xi'an and other partners.

Generally speaking, at the current stage, mutual financial giants introduce financial institutions. The main model is that mutual financial giants open their own platforms and users, access the products and funds of financial institutions, and use their own financial services The data accumulated in practical operations is accumulated and risk control work is done during the docking process.

Winter has arrived. As long as you survive, there is still hope

Therefore, the main scene is still on the mutual financial platform. So as the "empowered" objects, banks and other financial institutions actually have a larger existing business. Regarding this broader space, has the financial technology of mutual financial platforms begun to get involved, and how big is it? Space to display?

While Internet finance is developing rapidly, China’s banking industry is also paying increasing attention to financial technology. In the recent semi-annual reports of listed banks, we can also see that almost every bank has discussed finance. science and technology. However, according to the observation of Xue Hongyan, director of the Internet Finance Center of Suning Financial Research Institute, the financial technology transformation of the banking industry is still following the strategy. In theory, if mutual financial institutions are exploring ahead, banks can just follow suit. The strategy is clear, as long as If implemented effectively, results will be easily seen. However, many things are easy to say but difficult to implement. When they are actually implemented, it is often a different matter. The financial technology transformation of banks is still a progress that is more important than brand promotion.

Since the development of financial technology in banks is slow, the financial technology of mutual financial giants seems to have great potential. We have also seen that as early as 2017, the mutual financial giant BATJ had all made high-profile marriages with the four major banks "China Construction Industry and Peasants". Judging from the released information, the scope and model of cooperation cover all aspects. From the more abstract big data and cloud computing to the more specific credit system, online credit card opening business, etc., these also represent the future development direction of financial technology and are also operable.

But in fact, the genes of Internet companies and banks are very different. Internet companies have a high degree of flexibility, so they can quickly access bank products and funds. However, due to the conservatism of banks as licensed financial institutions and the internal complexity of their systems, it is difficult to graft the financial technology methods of mutual financial giants into their own systems. Even if they can, it usually requires a long and time-consuming process. A lot of cost.

Such costs may be unbearable for financial technology companies that only rely on technical services.

Moreover, from directly conducting financial business to relegating to a supporting role to help financial institutions do financial business, its profitability is likely to be compromised.

Take the profit-sharing model of Ant Financial’s Jiebei after introducing cooperative banks as an example. It is understood that the profit-sharing model of Jiebei mainly involves the banks providing funds collecting loan fees, and Ant Financial then collects loan fees from them. Obtain a fixed proportion of income. Although each company is slightly different, the income obtained by Ant Financial is generally around 30%.

The average daily interest rate of borrowing money is about 40,000 points, which translates into an annual interest rate of about 14.6%. Ant Financial gets 30% of it, which is about 4% annualized, and the remaining 10%. % was taken away by cooperative banks. Compared with Ant Financial's previous use of ABS to raise funds for Jiebei, Ant Financial's profits are greatly reduced. The cost of obtaining funds through ABS is about 5%. Now that we cooperate with banks, the cost of funds has doubled, and Ant Financial’s profits have also been reduced by half.

Of course, after financial supervision becomes stricter, Ant Financial may not be able to obtain funds at the same low cost as before. In this case, introducing bank funds may not be a bad choice. Furthermore, if the transaction volume can be made large enough, it can also make up for the shrinkage in unit price.

But in the changes of transformation, everything has actually become unpredictable. However, now that winter has arrived, transformation is certainly inevitable, but as long as we can survive, there is still hope. The seasons cycle, and the cycle will eventually pass.