My earliest understanding of Internet finance should be that Alipay obtained the first payment business license issued by the central bank in 201year, which means that my first contact with Internet finance was third-party payment. In fact, there was no concept of internet finance at that time, but I just thought it was cool to shop online and complete the payment. I often show off my shopping online with my classmates. I remember that many classmates and relatives asked me for help online shopping. In fact, the real understanding of the concept of internet finance should be that when Alipay launched the value-added service of account balance "Yu 'ebao" in 20 13, Yu 'ebao launched 7% of current income to deposit many people's pocket money into Yu 'ebao. As a student majoring in finance, I began to study the product model of Yu 'ebao, and learned that depositing in Yu 'ebao is actually buying the monetary fund issued by Rainbow Fund through Alipay. I slowly came into contact with the field of Internet finance, and later I gradually learned about P2P online lending, online crowdfunding, big data finance and so on. Today, the development of internet finance has been very common and accepted by the public. I think the most important significance of the development of Internet finance is to let the general public get in touch with finance, lower the threshold of getting in touch with the financial field, and truly let the ordinary people enjoy the dividends brought by finance and realize inclusive finance.
Financial product design for first contact with the Internet
During the summer vacation of July 20 13, I received a notice from the class teacher that the eighth national information technology application level competition was being registered. The School of Economics and Management asked me to choose a team to participate in the "Yin Bei Consumer Gold Cup" E-commerce and Internet Finance Competition in the 8th National Information Technology Application Level Competition. At that time, the head of our finance department found me (I was a member of the class at that time), hoping that our finance major could form a team, and then I found two of my old partners. At that time, the state only allowed qualified shareholders in Chengdu, Beijing, Shanghai and Tianjin to initiate the establishment of consumer finance companies. "Yin Bei Consumer Finance Cup" refers to the competition sponsored by Bank of Beijing Consumer Finance Company. The main task of this competition is to design an online consumer credit product, that is, consumers can provide loans to consumers through Bank of Beijing Consumer Finance Company to pay the price of goods. Now, it is similar to the pattern of JD.COM white stripes and staged music. I remember that when I was doing the online loan process, I had a general understanding of the settlement method of the third-party payment platform, and combined with the projects we participated in, I designed a set of payment and settlement methods suitable for online consumer credit. Finally, our team was lucky enough to win the second prize of "Yin Bei Consumer Gold Cup" e-commerce and Internet finance competition. I briefly looked at the plan I wrote before. In fact, there are many unreasonable and thoughtless places, and there was no concept of user experience at that time, no prototype drawing, and no product requirements document. At best, it can only be regarded as the solution of BRD and MRD, but in any case, this is the first time I really designed an internet financial product, although it is a bit rough.
Four Models of Internet Finance
In addition to the internet innovation of traditional financial institutions (such as online banking and mobile banking), this paper mainly introduces the internet finance of non-traditional financial institutions, that is, e-commerce enterprises that use internet technology to carry out financial operations. According to the current market, it can be roughly divided into four modes: P2P peer-to-peer lending platform, crowdfunding network investment platform, big data finance, and third-party payment platform. The author is relatively junior, and briefly analyzes his own P2P industry.
Peer-to-peer lending platform, P2P(peer-to-peer lending) simply refers to lending transactions between individuals who help borrowers and borrowers establish lending relationships and complete relevant transaction procedures with the help of e-commerce professional network platform. If the word P2P was mentioned two years ago, many people may not know it, but I believe most people will be familiar with it today, and some people should be P2P investors. The development of P2P online lending is really not easy, from the obscurity of establishing the first P2P platform in China in 2007 to the explosive growth of 14 and 15 (according to the data of online lending house, it has reached more than 3,900 P2P platforms at present). Various scandals (the most sensational one is the e-rental event involving tens of billions of huge funds) are constantly emerging, and the P2P industry has been constantly reshuffled on 16. The China Internet Finance Association was established on March 25th this year. P2P industry is becoming more and more rational. The major platforms have shifted their strategic focus to asset risk control and platform technology upgrading, instead of spending a lot of money on promotion, publicity and platform technology. In addition, the return on investment of major P2P platforms has also begun to decline. I remember at 14, I saw that the return of some platforms was around 20%, and the return of a few platforms was even more outrageous. Now basically returning to rationality, it is still in a downward channel. At present, the annualized rate of return of our platform 1 month is about 9%, and the annualized rate of return of 1 year is 12%. The average income of wealth management products of P2P platform will continue to decline in the later period. The author has always believed that the yield of all financial products, whether traditional financial products or network products, should be determined by the risk of assets, and the quality of P2P platform assets determines the yield of its financial products.
From the asset side, most P2P platform assets still come from small and medium-sized enterprises and personal loans (credit loans, consumer loans, mortgage loans). Small and medium-sized enterprises or individuals can't get loans in banks. P2P platform provides debt financing, equity financing or pre-sale financing services for these small and micro enterprises and individuals, helping them to raise funds online and ease the liquidity of funds. At present, China's small and medium-sized enterprises account for 90% of the total number of enterprises in the country, contributing 80% of jobs, 60% of GDP and 50% of taxes. Although this asset has certain risks, it has a very broad prospect.
As far as capital is concerned, this market is really huge. China people have a growing demand for wealth management. Now, the concept of keeping money in the bank has basically changed. More and more people are getting in touch with investment and have the will to manage money. China people are richer than I thought. Although we are still a second world country on the surface, China people may actually have more personal wealth than Americans. However, before the development of internet finance, Chinese people had very few investment channels. In addition to buying a house and speculating in stocks, most people should just put their money in the bank or buy some banks for financial management. This is why Yu 'ebao has become the world's largest monetary fund in less than two years since it was launched on 20 13, and its scale has exceeded 700 billion. Later, P2P developed, which greatly lowered the investment threshold. The investment threshold here not only refers to the threshold of investment amount, but also includes the threshold of obtaining information. With the Internet, people can find more investment channels, learn more about financial products and gradually realize inclusive finance. Before the emergence of internet finance, finance was played by rich bankers, and it was difficult for ordinary people to get in touch with some high-end investment opportunities. The development of the Internet has made many practitioners who used to engage in the Internet smell the big cake in the financial market, which also explains why more than 3,900 P2P platforms (online loan home data) have appeared in just a few years. It can be said that P2P should be the fourth investment channel for public contact, besides buying a house, stock trading and balance treasure.
What has Internet finance changed?
Generally speaking, the development of Internet finance has gone through several stages. The first stage of internet financial innovation should be online payment, represented by Alipay, which has a history of 10 years. The second wave is P2P peer-to-peer lending platform, an early platform represented by Paipai Loan and Hongling Venture Capital since 2007. The third wave is the hot equity crowdfunding and big data finance.
So, what does Internet finance bring? Different practitioners have different views. Most financial industry practitioners believe that the essence of Internet finance is finance, and the Internet is just a display tool. The author once thought so, but after contacting the Internet, I found that the development of Internet finance has surpassed the traditional financial form, not only as a carrier, but also as a service and experience, as well as a product model. In terms of service and experience, we may have to go to the business premises of financial institutions to receive services, but now we can receive various financial information services anytime and anywhere through the mobile Internet. This change is actually a change from taking traditional financial institutions as the core to taking users as the center. This is the power of the Internet. In terms of product models, there are also some new ways to play, such as consumption+financial management model, financial management+entertainment model and so on. Because of the internet, many things can be combined with each other to produce many different ways of playing.
Internet also plays a very important role in solving the problem of information asymmetry. In the financial industry, information is the core data of financial institutions. I believe everyone has heard that the Rothschild family relied on information faster than the British countries in the Battle of Waterloo. They were the first to know the outcome of the war and made 20 times the money in one day. The development of internet finance has solved some problems of information asymmetry to some extent. Before the Internet appeared, almost all information was in the hands of banks, so banks could make money lying down, but the development of the Internet is gradually changing this pattern.
In addition, the development of internet finance has greatly improved the efficiency of fund matching and reduced transaction costs. The core of finance is the exchange of value across time and space. The emergence of Internet finance makes the fund demanders no longer need to rely on traditional financial institutions such as banks, securities and insurance. Internet is the most effective, democratic and popular financing medium. To some extent, Internet financing has impacted the monopoly, low efficiency and high cost financing mode of banks.
It is true that the rapid development of internet finance in recent years has also brought many problems. The emergence of a new thing will certainly lead to various problems such as irregular, opaque and imperfect supervision. I won't describe it here. If you have any incorrect opinions and expressions, please give us your advice.