China intends to pressure the country’s tech giants, such as Ant Group, Tencent and JD.com, to share their users’ consumer loan data in order to prevent over-lending and fraud, according to two sources familiar with the matter.
Chinese regulators, including the Central Bank, plan to require internet platforms to share their vast data on loans to some of the country’s credit bureaus, a source said.
The agencies, which are run or supported by the People’s Bank of China, will share the data more widely with banks and other lenders to properly assess risks and avoid over-lending, the Reuters explains with reference to sources.
The agency notes that Ant and Tencent declined to comment, while JD.com and the People’s Bank of China (PBOC) did not immediately respond to requests for comment.
“Smaller banks are generally in a weaker position when they partner with tech giants like Ant. They have relied heavily on Ant data to underwrite loans and manage risk,” a top Chinese regulator, as quoted by Reuters.
- Coronavirus: Scientists develop an antibody that fights even new mutant strain
- How common are allergic reactions to the Moderna vaccine in the US, according to CDC
- Titan’s Kraken Mare surprises scientists with its depth
- Newbie Venom developer promotes a cure for COVID-19
- Scientists develop a spray that kills coronavirus in one minute
According to the source, “when defaults occur, they have to bear most of the losses.”Â
“It’s crucial for lenders to have better access to more comprehensive and detailed credit data on borrowers,” he added.
Meanwhile, tech companies charge high service fees to banks in exchange for access to millions of customers.
Through its Alipay app, Ant collects data from more than 1 billion people, as well as 80 million merchants.
Additionally, Ant runs Sesame Credit, one of the largest private credit rating platforms in China, with proprietary algorithms and methodology that rate individuals and small businesses based on their use of Ant-linked services.
The company provides limited information on borrowers to about 100 banks and charges so-called “technology service fees.”
