E-commerce giant Alibaba’s financial affiliate Thursday officially launched its online-only bank MYbank in Hangzhou, east China’s Zhejiang Province, making Internet-based financing one step closer to small- and medium-sized enterprises and individuals.
As one of the first five pilot private banks approved by China Banking Regulatory Commission, MYbank has 4 billion yuan (4 million) of registered capital and 30 percent of its stake is owned by Ant Financial Services Group.
The bank aims to serve small business, consumers and rural residents. Alibaba’s board chairman Jack Ma sets the goal that the bank will acquire 10 million small business users in five years. Big data will be playing a key role in MYbank.
“The loan limit to customers will be based on our big data model. Alibaba and Ant Financial have collected a huge database of customers’ transaction. We will analyze the data, and evaluate the credibility of customers,” said Yu Shengfa, president of MYbank.
Facial recognition technology developed by the bank was also showed at the press conference. This technology saves people’s errands to bank in order to open an account.
However, the technology has not been approved by authorities due to concerns over security risks. That could limit the business areas of online banks.
The first Chinese online private bank WEbank was launched last December. But the business is progressing slowly. Its first loan product went online in May. But it’s still just for an internal test. Only 20,000 users have activated the service. As a competitor, MYbank is planning to introduce its first product soon.
“The first product will be launched in early July. It’s a loan product facing individual consumer. The long-distance account opening service is not available yet. We will cooperate with other banks to get funding and finance small businesses and consumers,” said Yu.
Even though opening a savings account remains a problem for online-banks, anticipations are still high based on the huge number of Alibaba’s current users.
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