Editor's note: For most retail wealth management companies that want to survive, they will need to rely more on technology and data in the future to make it feasible to collect and standardize customer behavior and data, so as to do a good job of user identification and asset matching, and to construct a higher competitive barrier.

For many online lending companies struggling on the edge, the transformation of the asset side, the weakness of the customer acquisition channels and the increasing difficulty of compliance are like three mountains pressing them unable to breathe. This predicament makes a decade ago from North America's innovative financial model in China appears to be struggling, but also makes the online lending to face the "thinning of the mountain" of the inference at all times.

But much to the surprise of many in the industry, the recent rapid rise in the number of borrowers seems to give hope for a rebirth compared with the decline in the number of investors.

This new pattern, brought about by the so-called change in supply and demand, can bring about a brand new change in the online lending industry, and will it usher in a real "reverse spring" for online lending companies?

1. Reversal of the pattern

The home of online lending released such a report in early August. The report shows that since March 2017, the number of online loan borrowers is maintaining a continuous growth of more than 10% level. at the end of July, the industry's monthly active investment and borrowing number has reached a staggering 4,333,300 people and 4,031,500 people, respectively, while a year ago, the gap between the two is still around two million people.

"We will soon usher in the day when the number of borrowers surpasses the number of investors, and that will be a brand new first for the online lending industry." A researcher at a financial institute said.

Continuing downward pressure on regulation has led many to downplay the industry's prospects, but information from the number of borrowers has remained a "silent contribution" throughout the year.

According to the half-yearly report of the net lending house in 2016, a year ago, at the end of June 2016, the cumulative turnover of the net lending industry for 220750600000000 yuan, the number of people investing in the net lending industry and the number of borrowers in a single month in June, stayed at 338.27 million people and 112.41 million people, respectively, which is the difference in the value of the two in the year as high as more than 2.2 million. But just one year later, the reversal of this number of comparisons beyond the scope of many people's predictions.

Data show that as of June 2017, the number of active investors and active borrowers in the online lending industry had risen to 4.308 million and 3.7353 million, and by July, the number of active investors and active borrowers in the online lending industry had once again reached 4.3323 million and 4.0315 million. And in each of the monthly statistics before this, the number of industry borrowers are continuing to rise at a rate of several times more than the proportion of the increase in the number of investors.

It can be seen that, compared to a year ago, the number of investors rose by 1 million people, the number of borrowers more than 200% of the rise in the number of people began to really make people realize the change in supply and demand from both ends of the borrowing and lending.

"In fact, since the start of the year, we have noticed a subtle shift between these two numbers." A researcher replied, "The number of investors, which had been taking the lion's share, has produced slight fluctuations in the beginning of 2017, and even trended downward in some regions, while the number of borrowers has shown a big reversal, maintaining a high level for five consecutive months."

Many industry insiders and outsiders expect that online lending will soon see a new supply and demand relationship in which the number of borrowers exceeds the number of investors, and thus open up a new situation for the industry's development. But there are also some voices who believe that this change in the relationship will not bring a real "reversal" for the industry.

While we saw in the monthly report in July 2017, the cumulative volume of the online lending industry reached the 5 trillion mark, but in the recent statistics, we found that the monthly turnover for three consecutive months in May, June and July remained at about 250 billion yuan, the total turnover not only did not follow the rise in the number of borrowers to get an effective change, and even appeared a little in June. The slippery slope.

And in the statistics on the prosperity index, we also see that, contrary to the changes in turnover and the number of borrowers, the prosperity index in June and July showed a small decline. Professionals believe that the five dimensions of the prosperity index index analysis, full of inefficiency, investor confidence in the decline of many reasons, obviously more likely to dominate the industry trends and public opinion, and all the way to the borrowing end, in fact, can not bring the net lending "snow in the charcoal" effect.

2. "The gap between rich and poor"

Have the same idea not only part of the professionals, many involved in the actual operation of the platform operation of the person in charge of this also feel the same.

"The phenomenon of the rise in the number of borrowers, most of them are concentrated in small assets accounted for more enterprises, and most of the current online lending platform is actually still out of the process of solving the transformation of the asset side of the problem, can not be divided into the borrowing end of the strong performance of the dividends." A platform operations responsible person believes.

Even if the overall data seems eye-catching, but in the eyes of these operators, still can not cover other practical problems brought about by the transition dilemma.

Zero One data statistics show that as of the first half of 2017, the cumulative transaction scale of China's online lending industry exceeded 4 trillion, corresponding to about 13.5 million borrowers, corresponding to about 18 million investors. Among them, there are 12 online lending enterprises have realized the goal of borrowers exceeding investors, the first to join the "exceeding club". But at the same time, zero one financial also said, these 12 online lending enterprises are mainly small assets, or other transformation is more successful enterprises, and these enterprises rely heavily on light assets such as consumer credit bright support.

From the public data we found that the scale of consumer credit in the online lending industry in July 2017 reached about 34.3 billion yuan, up as much as 11.0% from the previous year, accounting for 13.6% of the overall scale of the online lending industry in that month. And in the list of consumer credit transaction volume in July we also see that there are 13 platforms consumer credit scale have shown significant growth, which occupies the list of the former Top top 3 companies even increased by more than 80% YoY.

"These platforms largely represent the 'head platforms' in today's asset transformation wave." A researcher at a financial research institute put it this way. And in the financial reports of these companies, we also find the expansion of light assets, for these companies to bring more changes.

August 17, the New York Stock Exchange-listed online lending platform, "letter of wealth" released its second quarter financial data. According to the report, the second quarter of 2017, the total transaction and service fee gross income amounted to $24.5 million, an increase of 59% year-on-year; the second quarter of 760,000 new borrowers, an increase of 39% year-on-year; the total number of aggregated borrowing transactions amounted to 5.1 million, aggregated borrowing transactions totaled 721 million U.S. dollars, a year-on-year increase of 354% and 244%, respectively. The biggest changes don't stop there. "We are pleased to see that the cash consumer borrowing business is driving the growth of Reliance." Principal Chief Financial Officer of Reliance, Hyun Hing Shen, has said. The phenomenon of cash consumer borrowing gross revenues exceeding lifestyle borrowing provides the platform with continued competitiveness, which is perhaps the biggest gain from rising borrower numbers.

Pai Pai Loan, a platform that flies the flag of micro-diversification, delivered a similar performance in the second quarter. The financial report showed that PaiPaiLoan realized 7.23 million borrowing demands for 3.82 million borrowers in the second quarter***, and the cumulative number of borrowers in a single quarter exceeded that of the whole of 2016. Combining the first and second quarter performance reports, PaiPaiLoan totaled 11.53 million borrowings in the first half of the year, and the number of borrowings was significantly ahead of the industry. Among them, the proportion of borrowings under 10,000 yuan reached 98.6 percent and the proportion of borrowings under 3,000 yuan reached 78.4 percent in the second quarter, compared with 98.08 percent and 70.98 percent in the first quarter, a further improvement.

In the asset transformation war, these "head" enterprises by the strong performance of the borrowing end, further dividing up the market has not yet been finalized, but most of the other online lending enterprises in fact is still unable to easily complete this "magnificent turn".

"Historical legacy problems are one, and the second is subject to regulation and market, asset transformation has to be considered in the long term." The person in charge of the online lending platform money nanny said. As a result of the phenomenon of overly concentrated large label in previous years, resulting in the existence of some platforms, the top 10% of borrowers occupy the entire platform of 90% of the borrowing amount of the abnormal phenomenon. In addition, the funding and time for the platform's transition to light assets is another thing that tests the platform. "Like money nannies in access to used car collateral assets, it has gone through many time-consuming and labor-intensive processes such as docking with automobile financial service companies and re-establishing risk control models."

But there are many other companies that will still be cleared out of the market because of their inability to resist the pain of asset-side transformation.

Many industry insiders said that after cash loans and campus loans were banned, the asset circle of the online lending industry is becoming more and more barren and scarce.On July 12, the Shenzhen Financial Office formally issued the "Notice on the Relevant Situation of the Cooperation of Internet Platforms and Various Exchanges in Financial Businesses", which puts the "cooperation relationship between online lending platforms and the JSE " draws a termination; July 17, Guangdong (non-Shenzhen) regional regulators require online lending platforms to prohibit all forms of debt transfer activities and services, which includes the transfer of claims between lenders; in mid-August, including Beijing, Shanghai and other places, the regulatory authorities have issued written or verbal notices to platforms, requiring platforms in the rectification plan stock of non-compliant business must be pressed down, no more New non-compliant business, business scale no longer increase, known as the industry as the "double drop" ban ......

Multiple types of assets layers of withdrawal, means that a large number of online lending enterprises can only go to compete for the "more porridge less "Consumer credit and car loans and other assets business. The later the transition is completed, it also means that the opportunity to eat the "borrower head dividend" will be more and more remote.

"But even platforms in the echelon of the anti-superiority club are facing another problem that is becoming more and more prominent." Said the head of a large domestic platform.

This "problem" refers to the fault of the investor. Although the total number of investors in the online lending industry is still rising year by year, but compared to the borrower's strong counterattack, the enthusiasm of investors obviously can not be the same day. The most notable is the "wool party" decrease.

"In the past, the wool party acted as the role of online lending platform traffic customers, but with the emergence of interest rates and risks and other issues in recent years, the position of these wool party has also been reduced." A platform customer director said.

According to Yingcan Consulting, the diversification of investors' choice of platforms is being further strengthened throughout 2016. Among them, the proportion of investors investing in only 1 platform dropped to 7.24%, more than half of the investors invested in the number of platforms between 2-5, while the proportion of investors dispersed to 11-20 and more than 21 platforms reached 9.48% and 4.46% respectively.

This means that the majority of investors no longer present "gambling" investment strategy, which also makes the platform may be less likely to invest in large amounts, and even the phenomenon of investment in customers.

In the investor survey, we found that, unlike the wool party in the past, the new investors put most of the expectations on the "big data credit" expectations, they hope that through this data penetration to grasp the risk of investment, rather than simply to earnings, activities to decide the next wave of investment choices. But this more technological requirements in a short period of time but still can not be satisfied.

"Aggressive investors have retreated, but the quality clientele hasn't really arrived for a number of reasons." Said an account director at a major platform. It's not really something to be anxious about at the moment, yet perhaps a phenomenon that many platforms will find tricky in the near future.

3. "Spring" where

Bain & China Merchants Bank in the "2017 China Private Wealth Report" statistics show that in 2016, China's individuals hold investable assets in the scale of 165 trillion yuan, while the compound growth rate of 2014-2016 reached 21%, is expected to reach the end of 2017 may reach 1.5 trillion yuan. It is expected to potentially reach RMB 188 trillion by the end of 2017.

With the rapid growth of residents' investable assets and the strengthening of their awareness of wealth preservation and appreciation, almost everyone believes that the spring of wealth management may soon come. But where is this "spring"?

A few days ago by the love of analysis issued by the Chinese wealth management enterprise valuation list, we seem to find some clues.

(Image source: public number love analysis)

In the list, we see that Lujinsho, net letter, small win technology and other enterprises in the top Top10 rankings, in addition to this, there are another digging wealth, with the hands of science and technology, tongbanjie, and other nearly twenty online lending enterprises occupy the list of 11th to 40th rankings. We found that "backed by the tree" and "core barriers" these two **** the same advantage, contributing to the greater core competitiveness of these enterprises.

Among the 17 companies in the retail wealth management track on the list, 8 of them are backed by group or shareholder resources, which not only bring low-cost customer acquisition, lighter assets and brand endorsement, but also enable the platforms to sustainably draw more nutrients for development under the "Matthew effect" market. The company's business is also a major player in the marketplace.

In the face of the reality of slower user growth, these companies also chose to deepen the depth of the asset side of the dilemma to deal with the conversion rate is not high, that is, we often say that the "asset closed loop". Most of the enterprises have realized more complete scenario operation through self-owned consumer installment and car loan business, while expanding the asset category horizontally, involving in multiple businesses such as mortgage, car loan, ABS and overseas assets.

"Building its own asset side and expanding asset categories may be able to increase its control over assets, especially at the risk level. At the same time, try to provide more diversified assets to increase the investment amount of customers, while increasing the rate or spread." A platform responsible person said.

But for most retail wealth management companies that want to survive, they will need to rely more on technology and data in the future to make it feasible to collect and standardize customer behavior and data, so as to do a good job of user identification and asset matching, and to construct a higher competitive barrier.

As the saying goes, the darkest hour is always before the dawn. For those who have seen the spring of online lending enterprises, before the light still have to spend this hard time baptism. Perhaps the survivors are not only the "lucky ones" who got the 100 licenses, but also the technology, innovation and change that came out of this darkness.