Feeling capable but lacking the strength

Overview

In the digital age, consumer finance companies cannot do without technological empowerment. Besides using technical tools to strengthen their core business, only a few companies have taken a tentative approach to technology output.

◎ Consumer finance digitization—focus on technology application

Most consumer finance institutions continue to invest in technological resources, which are mainly used for their own core business.

Build a digital marketing closed loop

Improve business capacity to support growth

◎ Consumer finance digitization—technology output practices

Among the more than ten consumer finance companies interviewed, only 2 reported having implemented cases of technology output. Some companies expressed willingness to output, but did not have a systematic rollout plan. Others explicitly said they currently have no technology output plan.

Only 2 companies have implemented technology output cases

Technology output to more than 200 financial institutions

Strengthen technology enablement in the ESG space

Output challenges

At present, for licensed consumer finance companies, it is somewhat difficult to output digital capabilities. Most companies still report that their business focus is developing performance rather than outputting digital capabilities.

◎ Challenges in consumer finance digitization—technology output

The lack of a complete data governance system and support from data assets leads to problems such as internal data gaps and low external data quality. The value of data still has room for further improvement in areas such as precise customer acquisition, risk control, and strategic decision-making. At present, cutting-edge technologies such as the Internet of Things, cloud computing, big data, artificial intelligence, and blockchain are key elements for the digital transformation of finance. However, these cutting-edge technologies have not been sufficiently integrated into consumer finance scenarios for application. There is also a lack of comprehensive exploration of application scenarios, customer acquisition models, and business development directions, so the driving force of new technologies for business has not been effectively unleashed. Technological talent is a core element and driving force for digitization, but there is still a shortage of high-end fintech talent, which limits innovation leadership and makes the digital transformation process slow.

The value of data resources has not been fully released

Insufficient depth in exploring cutting-edge technologies

Shortage of high-end fintech talent

Recommendations

The premise for outputting digital capabilities is that the company already has standardized capabilities. Otherwise, large investments made “for the sake of digital output” may lead to more harm than good.

◎ Recommendations for consumer finance—digital output

The consumer finance industry should actively shift from being a mere data hoarder to a data miner. Under the premise of complying with national regulations, meeting financial regulatory requirements, and doing a good job in consumer protection, efforts should be made to activate internal existing stock data and to leverage and revitalize external cooperation data. Companies should strengthen their independent technological innovation capabilities, and make targeted use of tools such as big data and cloud computing to excavate and analyze data, build a distinctive product system, and treat reducing customer acquisition costs and improving service quality as quantified standards. They should accelerate business approval processes and improve overall service quality and effectiveness. Establish a multi-level governance system for the whole society that includes legal constraints, administrative supervision, industry self-regulation, internal controls at institutions, and social oversight, to achieve full coverage in risk prevention and control.

Data is a foundational strategic resource

Technology-driven momentum for the digital transformation of the financial industry

Openness and interactivity in the digital age

(Editor-in-charge: Ma Luji HF120)

Report