Peer-to-peer lending, as a new internet financial format, provides a brand-new financing model, which breaks through the monopoly of financial institutions on financial business and facilitates individuals to directly participate in lending business, but at the same time, P2P should not be an extra-legal place.
Is peer-to-peer lending a financial institution?
Not strictly a financial institution. Why?
First, financial institutions do take financial photos, but peer-to-peer lending does not.
Second, financial institutions are credit intermediaries, but P2P online lending has always been characterized as an information intermediary, providing users with symmetrical information.
For traditional financial institutions, the P2P online loan that swept through this year was caught off guard. In addition, the actual benefits of Internet giants such as Ali, Baidu and Tencent after entering online loans have also made people deeply feel the power of P2P online lending and even the entire Internet finance. However, there are some conflicts between Internet finance and traditional financial institutions such as banks, securities and funds. Regardless of market share or public relations, internet finance poses a certain threat to traditional financial institutions in all aspects.
First of all, the operation of P2P peer-to-peer lending platform lacks a clear legal basis. China's P2P business is still in the early stage of development, and the existing legal system lacks an accurate definition of its nature. Formally, P2P is a kind of lending behavior, but because there is no intermediary like a bank, it is actually a kind of direct financing. In the absence of legal basis, it is easy to blur the boundary between P2P peer-to-peer lending and illegal fund-raising in practice. Secondly, P2P peer-to-peer lending lacks corresponding legal supervision.
At present, P2P companies are not financial institutions, so they are not included in China's financial supervision system. Due to the lack of entry barriers, industry standards and competent institutions, low illegal cost and asymmetric information in P2P industry, it is easy to induce some P2P peer-to-peer lending platforms to defraud loans by fictitious borrowers and high interest rates, thus endangering the financial security of investors. Thirdly, P2P peer-to-peer lending is difficult to completely protect the security of personal information. In order to ensure the authenticity of both parties' identities, P2P peer-to-peer lending usually requires customers to upload detailed personal information. Due to the imperfection of relevant security measures, it is easy to lead to the disclosure and abuse of personal information in practice. Once personal information is leaked or abused, it may bring economic losses and life troubles to customers.
Finally, P2P peer-to-peer lending may induce money laundering. Because P2P peer-to-peer lending is difficult to accurately verify the source and flow of each lender's funds, in the absence of supervision, criminals can easily use P2P peer-to-peer lending platform to engage in money laundering activities.