Ant Group to share consumer credit data with China’s central bank as regulatory overhaul continues

GUANGZHOU, China — Ant Group will share credit score information from its shopper lending enterprise with China’s central financial institution as a part of an overhaul of the fintech large.

Huabei is a shopper mortgage product underneath Ant Group. Knowledge from that lending product might be fed into the monetary credit score data database held by the Folks’s Financial institution of China (PBOC), Ant stated in an announcement Wednesday.

Data together with date of account arrange, quantity within the credit score line and standing of reimbursement might be offered to the central financial institution. Customers might want to authorize this. Particular data corresponding to particulars about time of purchases or items being purchased won’t be handed over to the PBOC.

Ant Group, which is managed by billionaire Alibaba founder Jack Ma, had its blockbuster initial public offering suspended in November over regulatory considerations.

Ant’s lending enterprise labored on a mannequin wherein it matched up debtors to lenders, corresponding to banks, however the firm didn’t underwrite these loans. As an alternative, banks bore many of the threat.

This anxious regulators who believed firms like Ant have been appearing like monetary establishments however not being regulated like them.

Chinese language regulators ordered a restructuring of Ant Group. In June, the corporate was given the green light to operate a consumer finance business with outdoors shareholders. This enterprise homes its Huabei and Jiebei mortgage merchandise and is known as Chongqing Ant Shopper Finance Co. Ant must partly underwrite extra of those loans.

Ant Group is at present within the strategy of changing into a monetary holding firm which might be overseen by the PBOC and different regulators.

A emblem of Ant Group is pictured on the headquarters of the corporate, an affiliate of Alibaba, in Hangzhou, Zhejiang province, China October 29, 2020.

Aly Music | Reuters

The info-sharing necessities with the PBOC brings Ant Group consistent with different monetary establishments within the lending area that are required to do the identical factor.

Ant Group stated some customers can already lookup the Huabei-related data of their credit score experiences with the central financial institution.

The corporate seems to be to assuage fears that the sharing of customers’ credit score information from Huabei may have an effect on their future capability to get loans.

“A complete and correct set of credit score data will allow monetary establishments to raised perceive customers’ creditworthiness and to raised serve them,” Ant Group stated in an announcement.

For my part, this implies the intent is to permit Ant to proceed its enterprise however underneath regulatory purview and guidelines.

“Due to this fact, underneath common circumstances and with the traditional utilization of Huabei and well timed repayments, the usage of different monetary companies corresponding to mortgage purposes won’t be impacted.”

Kevin Kwek, managing director and senior analyst at Bernstein, stated the credit score data-sharing settlement with the central financial institution clears “important” regulatory uncertainty round Ant Group.

“Sharing of knowledge after all erodes Ant’s edge, however doing so permits them to acquire regulatory blessings, corresponding to getting the patron finance license,” Kwek informed CNBC.

“For my part, this implies the intent is to permit Ant to proceed its enterprise however underneath regulatory purview and guidelines, and if it helps the broader shopper credit score bureau agenda. You will need to be aware that Ant will proceed to be dominant as a really giant distributor given its consumer base, even when it now has to share some information.”

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