China will pressure the country’s major technicians to exchange credit data – 01/11/2021 – Tec

China will put pressure on tech giants like Ant Group, Tencent and to share consumer credit data to avoid over-credit and fraud, two people familiar with the matter said.

The plan, if implemented, would effectively end the Chinese government’s more liberal stance on the sector and is yet another sign of attempts to control the country’s tech giants. Large internet platforms usually resist data delivery. This is a key benefit that helps them execute operations, manage risks, and acquire new customers.

Chinese regulators, including the People’s Bank of China, plan to instruct internet platforms to share their extensive credit data with some credit bureaus across the country, two sources said.

The agencies, which include the PBOC Credit Reference Center, China’s premier centralized credit rating system, and Baihang Credit, the country’s first licensed personal credit agency, will more widely share the data with banks and other lenders for appropriate risk assessment and avoidance of excessive borrowing, said the people.

Ant and Tencent declined to comment. and PBOC did not immediately respond to requests for comment.

“China seems to be making an unpopular, albeit correct, decision to sacrifice the closed-loop mentality financial paradigm in favor of a broader digital identity structure with potentially better access and long-term efficiency,” said Alex Sirakov, founder of AquariusX, a consulting firm in Shanghai.

The plan complements recent proposals to tighten control over tech giants and control the growth of businesses, particularly in the financial sector. The move contributed to the dramatic collapse of fintech Ant’s $ 37 billion initial public offering in November.

The latest regulation proposal for internet companies comes at a time when Beijing is raising concerns about the banks’ loose control of risk, particularly the smaller ones, on consumer credit and their over-reliance on platforms like Ant to find customers.

“Smaller banks tend to be in a weaker position when they work with giants like Ant. They rely heavily on Ant data to write loans and manage risk,” a regulator said.

“If a failure occurs, they will face most of the losses,” said the official, who refused to be named due to the sensitivity of the matter. “It is critical that lenders have better access to more complete and detailed credit information about borrowers.”

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