China’s MYbank opens API to Chinese financial institutions

MYbank, an online private commercial bank in China with a focus on SME financing, today announced the launch of the Star Plan to open up its AI, computing and risk management capabilities to financial institutions in China. Through sharing these technological capabilities, MYbank aims to enable 1,000 financial institutions to provide more cost-effective financing services to 30 million SMEs and farmers in China in the next three years.

“The widespread application of advanced technologies in the SME financing space has dramatically improved risk management and lowered costs,” MYbank chairman and Ant Financial executive chairman and CEO Eric Jing said. “With these innovations, we can unlock new opportunities for financial institutions and enable them to sustainably serve the needs of SMEs and farmers.”

According to Toward Universal Financial Inclusion in China, a joint report published by the People’s Bank of China (PBOC) and the World Bank in 2018, only 14 per cent of China’s small businesses have access to loans or line of credits, compared to 27 per cent of smaller firms in G20 countries. The report highlighted a number of reasons why SMEs did not apply for credit including complex application processes, high costs of obtaining a loan, insufficient loan size, and long review and approval periods. According to China’s State Administration for Market Regulation, as of July 2017, there were approximately 73 million SMEs in China.

“The traditional brick-and-mortar banking model is inefficient, with high costs and complex risk management processes. We always wanted to provide inclusive financial services for SMEs and farmers, but due to technology constraints, we were only able to service a few large scale clients in rural China,” said Neng Wang, chairman of Guilin Bank. “Ant Financial’s digital banking technologies helped us overcome the cost, efficiency, and risk barriers of SME financing, enabling us to service more clients in the rural market. Now, with Ant’s leading risk management capabilities, we are satisfied with the performance of our rural loan portfolio.”

Guilin Bank started working with MYbank in November 2015, leveraging its AI, computing and risk management technologies to offer collateral-free small business loans to farmers. As of June 2018, Guilin Bank had issued a cumulative RMB 350 million (approximately USD $54 million) in small business loans to more than 20,000 farmers.

With a focus on serving SMEs and farmers, MYbank was established in June 2015 and was among the first batch of pilot private commercial banks in China. It was also the first bank in China that was set up entirely on the cloud, without physical branches. As one of the brands under Ant Financial Services Group, MYbank leverages Ant Financial’s AI, computing and risk management technologies to improve customer service, increase efficiency, and reduce cost.

MYbank pioneered the “310 model” in SME financing – a business loan that takes less than three minutes to apply for on one’s mobile phone, less than one second to approve, and which requires zero human intervention. Using proprietary AI and risk management technologies, the non-performing loan (NPL) ratio for MYbank’s SME business loans has been maintained at around one per cent.

Sharing technological capabilities that allow other businesses to better serve customers has been part of Ant Financial’s DNA since the birth of Alipay in 2004, the company said. After opening up its payments services to a wide range of online and offline businesses, Ant Financial announced an “Internet Booster” plan in 2015 to support the digital transformation of traditional financial institutions by sharing Ant Financial’s technological capabilities.

In recent months, Ant Financial has accelerated its pace of opening up its technological capabilities to financial institutions. On June 19, 2018, Ant Financial announced it would share a full suite of AI capabilities with asset management companies to increase operational efficiency and reduce costs. In May 2018, banks including Huaxia Bank, China Everbright Bank, Shanghai Pudong Development Bank, China CITIC Bank, and Bank of Tianjin signed strategic cooperation agreements with Ant Financial to support the banks’ digital transformations.

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