Internet finance will take big risks

The “Second Quarter Monetary Policy Execution Report” released by the Central Bank recently showed that relying on big data analysis helps the Internet to solve information asymmetry and credit problems, provide more targeted special services and more diversified products. The substantial reduction in costs and risk diversification have increased the coverage of financial services, especially for small and micro enterprises, individual entrepreneurs and residents. Haiyin Wealth pointed out that the Internet finance industry provides a new channel between the capital demand side and the capital supply side, which is different from the traditional banking industry and the securities market, and improves the efficiency of capital financing. It is a useful supplement to the existing financial system.

The person in charge of Haiyin Wealth believes that the risks of Internet finance cannot be ignored either. On the one hand, the business risks, that is, credit risks, including breach of contract and other issues are very large. On the other hand, the advantage of the Internet is that the transparency of information is relatively high, but it also brings hidden risks of personal privacy leakage. In this regard, the national legislation still needs to be improved.