According to several sources quoted by ReutersChinese regulators are preparing to force their tech giants to share sensitive data about users’ consumer loans. An approach that is part of the new antitrust regulations in the Middle Kingdom, in which the authorities want to tighten the screws in the fintech sector.
Indeed, since the Ant Group’s historic IPO was suspended, the government has shown its ambition to regain control of its tech giants. In addition to opening an antitrust investigation into Alibaba, China has asked Ant Group to transform its business and it appears it wants to go much further.
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The authorities will therefore instruct the platforms to submit their extensive credit data to some of the national credit agencies. These agencies, supported by the People’s Bank of China, will then pass this data on to banks and other lenders in order to assess risks and avoid over-indebtedness. This applies in particular to Ant Group, Tencent and JD.com. This would be a first for companies that are generally reluctant to share their data, as it is vital for them to conduct their business and attract new customers.
This move is likely to have an impact on the revenue of companies like Alipay. The latter contains data on more than 1 billion users and nearly 80 million companies. Ant Group also owns the Sesame Credit App, which provides limited borrower information to around 100 banks and charges a $ 30-40 “technology service fee”. % of the interest on loans that makes it easier. For their part, Tencent and JD.com are less popular in the fintech space, but their subsidiaries still work with millions of Chinese.
By accessing this data, authorities can regain control of small banks, which are in a weak position in their partnerships with tech giants, and of the financial sector in general. “” When failures occur, they bear most of the losses. It is critical that lenders have better access to more complete and detailed credit information on borrowers Says a regulator that is refusing to be named due to the sensitivity of the issue.
The companies concerned initially refused to comment on this decision.
