From the year of 2013 that publicly believed as the beginning year of internet finance, to the year of 2014 that had rapid development of innovative market and reform, then to the year of 2015 the bubble of bull market gradually receded, relative policies successively published and implemented; internet finance is gradually growing from savage to mature then to regular.
Looking back the year of 2015, “internet finance –a new force suddenly rises” from “Working Report of Government” in March 5th, “The Guidance Opinions on Promoting Health Development of Internet Finance” supports health development of internet finance in July 18th, “The Management Methods of Online Payment Business for Non-Banking Payment Institutions (Draft)” regulates network payment in July 31st, finally “The Management Methods of Business for Network Borrowing Information Agency (Draft)” provided negative list and positive requirements in the end of 2015. To sum up, the year of 2015 is a year to provide encouragement and support as well as regulation and regulatory for internet finance, like “regulating development of internet finance” indicated in “the 13th Five – Year’s Schedule”.
At the same time, we can see the acceptances from capital for good internet finance marks. Ant Financial finished A round of financing with valuation of more than 45 billion USD; LU.com finished B round of 1.216 billion USD financing with valuation of 18.5 billion USD; JD Financial finished A round of 1 billion USD financing with valuation 46 billion RMB. The last two financing fully proved that market also has confidence for internet finance development in 2016 although current situation publicly believed as winter of capital. After industry experienced savage, popular, gradual bubble and slowly regulate, we believe that really good internet finance companies, internet finance business will have new round of outbreak and growth in 2016.
For internet finance, if past was the era depending on drainage to increase quantities of users and flowing; the future will focus on “realization”. Internet finance accomplishes growth of income and profit via providing good & high added-value finance services for huge amount of users accumulated in early period, finally will provide high quality “long-tail” and individual service gradually. In this process, some segments of internet finance will stand out and become leader.
The profit of flowing is gradually disappearing. In future holding precise scene is key way that depends on consumption scene closely relating with users to provide high quality finance services, which becomes base of consumption finance development and continually accomplishing realization. Good consumption finance enterprises accumulate huge amount of good consumers via hard works in relative vertical segmentation and industry chains, hold good assets ends that can continually exchange flowing into cash.
As key and basic support of internet finance, mobile payment always is popular market for each competitor. Forming internet ecological closed-loop via controlling payment has become base to explore users’ value. In future, enterprises who have voice right in mobile payment will accomplish layout in advance from payment to all internet finance scenes.
Internet Security and Insurance
With people who had born in 1980s or 1990s gradually accumulating wealth, the demand for security, fund and insurance products gradually rose. As generation accompanied by development of internet, they have relatively high tolerance for risk and higher acceptance for internet finance. These people will become internet finance users with highly added value. For insurance industry, with continually promoting aging population and urbanization, based on their own advantages of insurance products, insurance products gradually transfer from “passive sales” to “active demands”; thus, internet insurance will bring golden period of development. The natural feature of insurance provides more advantages such as long duration, low cost and gradually flexible investment that will become main force of internetized finance products with strong ability of “realization”.
In process of transferring introducing flowing to focusing on cash, consumption finance, mobile payment, internet security and insurance as well as other internet segmentation will bring a good year with great achievements in 2016 from root before 2013 and flourish in 2014-2015. Under this development environment gradually be formed and effectively regulated, internet finance will be major breakthrough of internet finance development in 2016.
BAT and Giants
In future, internet finance industry may have a large-scale shuffle. In the past round of development, we can see that numerous barbarian at the threshold of finance industry accomplished metamorphosis from zero to one via help from industrial development; meanwhile, BAT with most gens of internet and traditional finance institutions that were night watchmen of finance industry bring us endless image space from their interaction and cooperation. Based on accumulation and position in the field of internet and layout in the field of finance, BAT—the three giants in internet are still at the leading position among all internet companies financialization.
BAT have different advantages: Alibaba based on its leading position in the field of e-commerce, has accumulated huge amount of B-end and C-end users from online to offline; Tencent based on its own two main tools—QQ and Wechat, closely hold area of socialization; Baidu based on precise search, continually accumulated huge amount of data. The three giants always attract public attentions surrounding payment in the development of internet finance business. Baidu may be ignored by the public; however, the giant who has strong technical strength is finishing layout in segmentation quietly.
During the period of discussing development of internet finance, we can’t ignore a key element—data. Currently, in our opinions, big data can’t meet demands of internet finance in new era; in future, we will enter into an era of “super data” to break limitation of static knowledge and physical contact from original data, to form new and formal language, to greatly improve scalability of data, to finish visual data query & computing & exhibition, and to really accomplish intelligent finance service based on data that will be main stream in future.
At the same time of high speed development of internet finance, we can’t ignore many risks of development.
With gradually slow development of economy, in future there will be many small & middle-size enterprises facing problems of lacking of cash flows that may lead fracture of capital chain at any time. For some small & middle-size enterprises, internet finance business as the end of assets will face relatively high risks.
Many internet finance enterprises have not strict systems of credit investigation and risk control, especially many consumption finance companies blindly developed their businesses in the past and hadn’t formed credit system for users; thus bad debts had been gradually accumulated to lead hidden trouble for enterprises’ development.
In the year of 2016, internet finance industry will be continually regulated; the industry regulatory level will be continually improved. In the past barbaric development, many enterprises ignored controlling business that lead illegal phenomenon such as illegal fund-raising and finance products excluded selling business scope; all of these will bring enterprises into trouble.