By Li Yi'an

Recently, the Financial Times released a report on the development of China's private banks, saying that despite the difficulties encountered by some of them in the process of exploring, the overall development trend is good, and the number of indicators is higher than the average level of commercial banks, with the growth rate of micro-credit banks and online banks being the most prominent.

But in fact, as the twin stars of the private banks, the development path of the network business and micro-zones reflected not only Ali, Tencent's Yuliang struggle, but also the micro-finance and consumer finance industry ups and downs.

A closer look at the names of the two banks, Netcom and Microcosmos, reveals the difference in their positioning, with the former focusing on "business" and the latter on "business".

1.

Private Bank Twins

On March 5, Netcombank held a board meeting. The board of directors during the news of executive personnel changes, in addition to the ant gold service president Hu Xiaoming will succeed Jing Xiantong become chairman of the network business bank, the network business bank former vice president Jin Xiaolong is rumored to be promoted to the network business bank president, the original president Huang Hao will be in the ant gold service system to take a higher position.

Although the above arrangements still need to wait for the formal approval of the regulatory authorities, to a certain extent, the personnel changes of the network business bank is closely related to the pulse of its business development.

Public information shows that Jin Xiaolong, who will be promoted to president of Netcommerce Bank, has served as president of Ping An Bank's Small Business Finance Division and Network Finance Division, general manager of the Cash Management Department, and general manager of Shenzhen Development Bank's Cash Management Department, etc. Since joining Netcommerce Bank as vice president in March 2017, Netcommerce Bank has been running in the field of micro- and small business at an alarming rate, which is not unrelated to Jin Xiaolong's rich experience in small business services. Small business service experience is not unrelated.

In June last year, the third anniversary conference of the founding of the Netcommerce Bank had announced that the first phase of the goal was completed two years ahead of schedule, and the number of small and medium-sized enterprises in service exceeded 10 million. On March 1 this year, Jin Xiaolong revealed that, at present, the Netcommerce Bank and more than 400 financial institutions to realize the cooperation, and has been serving more than 15 million small and medium-sized enterprises. At the same time, also added a new KPI: within three years to make the country's roadside stalls can be loaned.

It is conceivable that with the promotion of Jin Xiaolong to the presidency, this KPI may become the next most important target of Netcombank.

Although micro-banking also has small and micro-enterprise services, but according to the data released by the micro-banking side of the micro-business on-line time is 2017, to December 2018 also only served 340,000 small and micro-enterprises. The core of the business that MicroCredit Bank really focuses on remains the consumer credit business for individual consumers.

We are targeting the unsecured consumer finance market, and although there are also micro-enterprise loans, micro-vehicle loans and other loan products, but the core product "particulate loans" both in terms of scale and profit contribution accounted for the mainstream of the overall business of the micro-credit bank.

Based on the WeChat ecosystem, particulate credit is born with WeChat's traffic entrance, on the one hand, it allows particulate credit to have a huge amount of C-end data as the basis for accurate customer acquisition and risk control, on the other hand, it also attracts a large number of financial institutions flocking to cooperate with particulate credit to pry the leverage of the form of joint credit, and to make the scale bigger.

The 2018 annual report has not yet come out, and the latest public data is that by the end of 2017, micro-banking has lent a total of 870 billion yuan to 12 million people.

This is the pulse of MicroBank's development over the past four years or so.

2.

The dark rubbing of the competition

With the development trend at the moment, Netcombank may have chosen a more difficult path.

In fact, in the traditional banking business, microfinance and consumer finance, although both belong to the scope of the retail banking system, but the two behind the product ideas and the logic of risk control is very different.

On the one hand, the interest rate of consumer credit is on average higher than the interest rate of business loans, and from the data shown on their product side, we can roughly count that the annualized interest rate of Microfinance is on average 14%-18%, and that of Netcombank is around 12%.

On the other hand, from the cost point of view to consider, small and microenterprise loans there are difficult to obtain customers, high cost, thin profits, low returns, etc., in order to reach more small and microenterprises and self-employed, not only need to cultivate their own internal strength in the product, system, technology, wind control and other levels, but also need to some industrial partners to support the extension, such as to some isv (independent developers) to give Incentives such as channel commission sharing are also needed for some industrial partners. As merchant expansion continues to accelerate, the cost pressures brought about by the concessions to small and micro-enterprises and the support of industry will inevitably compress some of the profit margins. From the data published on the side of the network business bank, the average lending rate given to small and micro enterprises by the network business in 2018 alone fell by 1 percentage point compared to 2017.

Of course, the loan business of micro-banking is not the only micro-particle loan, micro-banking also has small and micro-enterprise loans, micro-vehicle loans, but these two products are only embodied in the APP of micro-banking, the cost of the traffic is slightly higher, but it does not account for a high proportion of the overall business, so the overall cost is controllable. The energy injected into Microparticle Loan by its innate traffic advantage in the nine-grid page based on the WeChat ecosystem has so far given Microparticle Loan an absolute advantage in the overall business contribution of MicroBank. Therefore, on the whole, compared with Netcommerce Bank, Microcosmos has a clear cost advantage.

Although the 2018 annual report data has not yet been released, but in terms of the historical data of 2017, the performance of the performance data in terms of revenue, profit, lending scale and other performance data is indeed inferior to Microcentral Bank. But the fact is that Internet banks, because the business model is based on the Internet, its judgment standards are not the same as those of traditional banks, especially for these two banks with special backgrounds, it is too simple to judge heroes only by their performance.

Because they are rooted in different genes, the two banks have shown extremely different organizational forms from the beginning.

And Weizhong Bank is just one piece of the puzzle in Tencent's financial landscape. In Tencent's financial map, there is also WeChat Pay, Paypal, Wealth Management, micro-insurance, blockchain and so on. Tencent has not established an independent business group for financial business, nor a unified brand. Tencent President Liu Chiping has frankly said that finance is a very high degree of professionalism in the field, Tencent has a very reverent heart, for Tencent's financial technology, how to develop in the future, Tencent itself does not have a standard answer. Therefore, the independent development of financial services is seen as a strategic choice for Tencent.

However, under a more compact business structure, the synergies shown by Netcombank in the Ant Financial Services system are indeed much stronger than those shown by MicroBank in the Tencent system.

First of all, the ability of Netcommerce Bank to serve the B-side superimposed on the C-side services of Alipay, Chanting, Borrowing, Sesame Credit and other products within the Ant Financial Services system, so that the service elasticity of the Ant Financial Services is greatly increased. A person inside the ant described to the cross financial "hope to the B side, the ant gold service provides products like Lego blocks, according to their needs, any combination, seamless adaptation". This also means that a significant portion of the business contribution of the online business bank is reflected in the ant gold service system.

Secondly, the big data accumulated from the various product matrices of Ant Gold Service can further enrich the risk control model, which provides a better basis for risk control for the small and micro business served by Netcommerce. "The service 30 million small micro-merchants, covering the roadside vendors," this means that the market will further sink, but also means higher costs and risks. The reason why Jin Xiaolong dared to say so, this may also be an important reason.