Internet financial classification Internet financial products are generally divided into five major categories: 1. Payment categories, such as Alipay, Tenpay, JD Pay, etc.; 2. Loan categories, such as Ant Borrowing Huabei, JD Baitiao, and Ping An Yidai, etc.; 3. Financial management category, JD Finance, Yu’e Bao, NetEase Financial Management, Tongbanjie, etc.; 4. Internet securities category, mainly companies that operate stock trading software to provide information, such as Ping An Securities; 5. Other categories, Internet Financial innovative products, some are emerging but have not yet reached scale.

Internet Finance

Internet Finance (ITFIN) refers to a new type of finance in which traditional financial institutions and Internet companies use Internet technology and information and communication technology to achieve financing, payment, investment and information intermediary services. business model.

Internet finance is not a simple combination of the Internet and the financial industry. It is based on the realization of network technologies such as security and mobile. After being familiar and accepted by users (especially the acceptance of e-commerce), it will naturally adapt to the new situation. New models and new businesses arising from the needs. It is an emerging field that combines the traditional financial industry with Internet technology. On October 13, 2016, the General Office of the State Council issued the “Notice on the Implementation Plan for Special Rectification of Internet Financial Risks.”

Characteristics of Internet Finance

Low Cost

Under the Internet finance model, both parties in the supply and demand of funds can complete information screening, matching, pricing and transactions through the network platform. Traditional intermediary, no transaction costs, no monopoly profits. On the one hand, financial institutions can avoid the capital investment and operating costs of opening business outlets; on the other hand, consumers can quickly find financial products that suit them on an open and transparent platform, which reduces information asymmetry and saves time and effort.

High efficiency

Internet financial services are mainly processed by computers, and the operating procedures are completely standardized. Customers do not need to wait in line, the business processing speed is faster, and the user experience is better. For example, Alibaba Small Loan relies on the credit database accumulated by e-commerce, and through data mining and analysis, it introduces risk analysis and credit investigation models. It only takes a few seconds for merchants to apply for a loan and issue it, and can complete an average of 10,000 loans per day, becoming a real "Credit factory".

Wide coverage

Under the Internet financial model, customers can break through time and geographical constraints and find the financial resources they need on the Internet. Financial services are more direct and the customer base is broader. In addition, the customers of Internet finance are mainly small and micro enterprises, covering some of the blind spots of financial services in the traditional financial industry, which is conducive to improving the efficiency of resource allocation and promoting the development of the real economy.

Rapid development

Relying on the development of big data and e-commerce, Internet finance has grown rapidly. Take Yu'E Bao as an example. Within 18 days of its launch, Yu'E Bao has accumulated more than 2.5 million users and 6.6 billion yuan in transferred funds. According to reports, Yu’e Bao has a scale of 50 billion yuan, making it the largest public offering fund.

Weak management

First, weak risk control. Internet finance has not yet been connected to the credit reporting system of the People's Bank of China, and there is no credit information sharing mechanism. It does not have risk control, compliance and collection mechanisms similar to those of banks, and is prone to various risk problems. There is already Zhongdai.com P2P online lending platforms such as Wangyingtianxia and Wangyingtianxia declared bankruptcy or ceased services. Second, supervision is weak. Internet finance is in its infancy in China, with no regulatory and legal constraints, lack of entry thresholds and industry regulations, and the entire industry faces many policy and legal risks.

High risk

First, the credit risk is high. At this stage, China's credit system is not yet perfect, and the laws related to Internet finance have yet to be implemented. Internet finance has lower default costs, which can easily lead to risk problems such as malicious loan fraud and money withdrawals. In particular, P2P online lending platforms have become a breeding ground for criminals to engage in criminal activities such as illegal fund-raising and fraud due to low entry barriers and lack of supervision. Since last year, P2P online lending platforms such as Taojindai, Youyi.com, and Antai Excellence have successively exposed incidents of "runaway" incidents.

Second, network security risks are high. China's Internet security problems are prominent, and the problem of online financial crimes cannot be ignored. Once hackers attack, the normal operation of Internet finance will be affected, endangering consumers' financial security and personal information security.

Legal basis:

Article 176 of the "Criminal Law" Crime of illegally absorbing public deposits

Illegally absorbing public deposits or absorbing public deposits in disguised form, disrupting Whoever violates financial order shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention, and shall also or shall be fined not less than 20,000 yuan but not more than 200,000 yuan; if the amount is huge or there are other serious circumstances, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than 10 years, and shall also be fined not less than 20,000 yuan but not more than 200,000 yuan. A fine of not less than 50,000 yuan but not more than 500,000 yuan is imposed. If a unit commits the crime in the preceding paragraph, the unit shall be fined, and the person directly in charge and other directly responsible personnel shall be punished in accordance with the provisions of the preceding paragraph.