Pre-loan: Customer acquisition favors traffic generation

Since the pilot opening of the first batch of consumer finance licenses, it has been 12 years. From racing to grab market share to refining operations with greater care, the “smoke and dust” of competition among institutions in their differentiated tracks—customer acquisition, risk control, and scenario segmentation—has never truly faded.

Today, building digital capabilities to improve business performance and achieve cost reduction and efficiency gains has become, for nearly all consumer finance companies, a must-do choice—and also a key lever for consumer finance companies to break through in competitive markets.

How well is consumer finance digitalization progressing? Recently, a reporter from Beijing Business Today conducted an investigation into 16 consumer finance institutions of different sizes across the industry. The goal was to deeply review the state of digital applications in the consumer finance sector across five dimensions: pre-loan, during-the-loan, post-loan, output, and inclusive finance.

Business layout

In the early stage of consumer finance development, offline customer acquisition was widely pursued. After changes in the industry, more convenient and flexible online channels have become a popular choice for consumer finance institutions.

◎ Online and offline integration has become the mainstream

At present, in terms of the overall business layout of the consumer finance industry, leading institutions such as Zhaolian Consumer Finance and Industrial Bank Consumer Finance each represent operating models with a primary focus on online and offline business, respectively. Their performance is also among the best in the industry.

100% online business deployment

Business layout gradually optimized

◎ Marketing sheds reliance on manual effort

No matter what operating model is used, how to do a good job in acquiring customers, keeping customers active, and attracting new customers remains a core issue for consumer finance institutions in the pre-loan business stage. Based on feedback from the interviewed institutions, depending on their respective online and offline business layouts, the platforms they rely on for their customer-acquisition playbooks also differ in emphasis.

Self-operated channel building steadily improving

Third-party referrals are the main customer-acquisition method

Credit underwriting

In the pre-loan review stage, what needs to be addressed is how to obtain borrowers’ information in a truly accurate and sufficiently comprehensive manner, and how to provide support for credit decision-making.

◎ Qualification screening mainly conducted online

According to feedback from interviewed consumer finance institutions, after users submit the relevant information through online channels, the system automatically evaluates their qualifications. Even for offline business, more than 70% of consumer finance institutions conduct reviews through online channels. The remaining consumer finance companies, based on “in-person audits and visits” and “face-to-face interviews and signing,” additionally incorporate online review steps to reduce manual intervention as much as possible.

◎ Building a credit marketing ecosystem that is independently controlled

From the information provided by the interviewed institutions, all 16 consumer finance institutions have built a credit marketing ecosystem that is independently controllable. In addition, three institutions mentioned that they have built digital infrastructure themselves, running through the full process of consumer finance institutions’ business development. Leveraging digital technologies such as artificial intelligence and big data, the institutions, on the basis of “real-time decision-making and instant approval and instant lending,” further add more diversified risk-prevention measures.

Challenges in business development

Focusing on the pre-loan stage, the 16 interviewed consumer finance institutions concentrated their challenges primarily on online risk control.

◎ Data asymmetry

“Credit-thin” customers often have characteristics such as insufficient data and missing key information, making it difficult to judge their repayment ability and credit level. When consumer finance institutions conduct credit granting for this group of people, they need to achieve more comprehensive risk identification.

◎ Personal information and data privacy protection

Financial business often requires collecting privacy information such as users’ national ID numbers, bank card numbers, home addresses, and phonebook contacts, while also requiring the organization, analysis, and even sharing of multi-dimensional data. As user privacy data protection increasingly draws attention, consumer finance that relies on data cannot do without the proper use of data under compliance prerequisites.

◎ Balancing different audiences’ acceptance capabilities

Different social groups may experience differences in the application of digital finance. The development of digital technologies may create a “digital divide,” isolating some groups from the progress of digitalization in consumer finance and preventing them from enjoying the dividends brought by the digital economy.

◎ Lack of specialized, compound talent

There is an imbalance in the availability of fintech talent, especially high-end talent, across both space and time. Universities have only just started training compound talent, and within a short period it is difficult to achieve a balance between supply and demand.

(Editor: Ma Jinlu HF120)

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