GUANGZHOU, China – Ant Group will share its consumer nnding business credit data with China’s central bank as part of Fintech Giant’s reforms.
A consumer loan product under Huawei Ant Group. The financial credit information database held by the People’s Bank of China (PBOC) will provide information on those products, Ant said in a statement on Wednesday.
Information including account set-up date, credit line amount and payment status will be provided to the Central Bank. Users need to approve it. Specific information such as the time of purchase or the time of purchase of the product will not be transferred to PBOC.
Ant Group, controlled by Jack Ma, founder of billionaire Alibaba, suspended its blockbuster initial public offering in November due to regulatory concerns.
The antendering business worked on a model where it matched donors, such as banks, but the company did not underwrite those. Instead, banks carry the most risk.
These worried regulators who believed that companies like ants were acting like financial institutions but not being regulated like them.
Chinese regulators ordered the reorganization of the ant group. In June, the company was given the green light to conduct a consumer finance business with outside shareholders. This business has Huawei and Zebei loan products and the so-called Chongqing Ant Consumer Finance Co. ants will have to write more on this.
Ant Group is currently in the process of becoming a financial holding company that will be overseen by the PBOC and other regulators.
An Ant Group logo is depicted at the headquarters of Alibaba’s subsidiary in Hangzhou, Zhejiang Province, China, October 29, 2020.
Ali Song | Reuters
The need for data-sharing with PBOCs makes Ant Group compliant with other financial institutions in terms of financial payments, which has to do the same.
Ant Group says some users may already see Huawei-related records in their credit reports to the central bank.
The company fears that sharing users’ credit data from Huawei could affect their future ability to receive.
“A comprehensive and accurate set of credit records will enable financial institutions to better understand users’ creditworthiness and better serve them,” Ant Group said in a statement.
“Therefore, under normal circumstances and with normal use of Huawei and timely payments, the use of other financial services such as loan applications will not be affected.”
Kevin Quake, Bernstein’s managing director and senior analyst, said the credit data-sharing agreement with the central bank clears “significant” regulatory uncertainty around Ant Group.
“Of course data sharing erodes the edge of ant, but doing so could give them regulatory blessings, such as getting a consumer finance license,” Quake told CNBC.
“In my view, this means allowing the ant to continue its business but under regulatory powers and rules. The big distributor has given up its user base, even if it has to share some data now.”