Alibaba launches commercial internet bank

Want China Times, Lai Chao-nan and Staff Reporter, 2015-06-27

Jack Ma speaks at the opening ceremony of Mybank in Hangzhou,
Zhejiang, June 25. (File photo/CFP)

Chinese e-commerce giant Alibaba has officially forayed into the banking industry with the establishment of an internet bank that was officially opened June 25, our sister paper Taipei's China Times reports.

The Zhejiang Internet Commerce Bank was established by six shareholders led by Alibaba's Zhejiang-based financial unit, Ant Financial. The internet bank will mainly provide loans to micro-enterprises in the initial phase, according to Alibaba founder Jack Ma.

China's banking system is dominated by large state-owned institutions that have traditionally favored lending to big, state-owned corporations. Small, privately owned companies have often struggled to obtain capital.

Alibaba can exploit its big data advantage by looking at its internal transaction data to assess risk. That will give the company an advantage in terms of finding micro-sized clients, said Jing Xiandong, chairman of the online bank.

Ant Financial's new Sesame Credit agency will evaluate customers' creditworthiness, using Alibaba's enormous database that comprises information from 300 million "real-name" users and 37 million registered firms, according to an earlier report.

Governor of the online bank Yu Shengfa said that unlike traditional banks, the internet bank can better safeguard customers' data through improved management of information, using its big data systems and state-of-the-art technology.

The debut of Sesame Credit will not only enable credit providers to make holistic and accurate decisions, but will also allow other companies to provide more credit-related services, a spokesperson for the bank said earlier.

Ma said Alibaba's next step, following the launch of its internet bank, is to establish a new financial system to serve individuals and small companies.