7 Chaos Of Internet Finance: False Propaganda And Over Commitment

Internet finance is the third party financial intermediation service provided by non-financial organizations of Internet information services on the basis of their own network platform, which is essentially different from the "network finance" business carried out by financial institutions. The main body of Internet finance can not provide financial products in itself, and "network finance" is the online financial services carried out by financial institutions relying on network information technology. It is an online expansion of traditional financial businesses, and its business entities not only provide network financial services, but also provide a wide variety of financial products and financial instruments. Internet finance is essentially a financial value-added telecommunications business based on technologies such as Internet, cloud computing and big data. At this stage, Internet Finance covers roughly third party payment, P2P net loan, public financing, Internet financial management and Internet financial information services. The analysis of Internet financial chaos is based on the above concepts.

　　 Chaos one: Internet finance concept confusion

Although Internet finance is a hot term in recent two years and the focus of attention of the people and senior officials, there is still no official document to make an authoritative and complete definition of it. Therefore, the definition of Internet Finance in various media reports, academic documents and even local government policy documents is varied.

First of all, many news media, government officials and some professional scholars all have confusion about the concept and scope of Internet finance. Whether from the media coverage of the "Internet finance" since 2013, or from the experts' remarks on the Internet Financial Forum held by various portals and relevant departments, there is ambiguity in the understanding of the concept of "Internet finance" and its business boundaries. Even some professional textbooks, such as the electronic payment and Internet Bank undergraduate course materials published by Shanghai University of Finance and Economics press in March 2014, have confused the concepts of Internet banking and Internet banking, Internet Finance and Internet finance, and their obvious differences in business boundaries and legitimate business entities. The main reason for this kind of cognitive bias is the habit of people's understanding of the concept of unjust words. Internet Finance and Internet finance are the basic concepts established by the industry. However, there are obvious differences between the two in terms of their true meaning, scope of business, or the institutional nature of their legitimate business entities.

Secondly, the definition of Internet Finance conflicts with the guidance of local governments. 現已出臺的多個支持互聯網金融發展政策的地方文件中，除北京、南京兩市外，其他都對互聯網金融給出了官方“定義”，但是我們發現他們之間存在著很大的不一致：如在天津、深圳的文件中，當地政府將互聯網金融產業定義為互聯網與金融業的融合，這與互聯網金融的學術定義并不相符;貴陽市的定義僅僅將現有的互聯網金融的形式進行了羅列，但是并沒有給出完整的定義，未來在一定程度上可能會限制其他新型企業的創新;相對定義較為科學的是上海市的文件，其定義為“基于互聯網及移動通信、大數據、云計算、社交平臺、搜索引擎等信息技術，實現資金融通、支付、結算等金融相關服務的金融業態，是現有金融體系的進一步完善和普惠金融的重要內容”，但在類型羅列中依然還是將傳統金融的線上業務算入在內，這是各地方政府文件中都存在的問題。

　　 Chaos two: Internet Banking Scope of business confusion

Take the P2P net loan business as an example, P2P mainly provides information services for the borrowers and borrowers through the Internet platform, but in practice there is a business overlap between the public offering of investment services and traditional banks. 如P2P網貸平臺“正規軍”陸金所采用線下審核的一對一模式，專業擔保公司全額擔保，一個貸款人只對應一個借款人，批量打包借款需求，整合成理財產品對外銷售，所以其實如果狹隘的按照P2P的概念來說，陸金所只是披著P2P外衣的小貸銀行;又如手機貸模式：平臺只是中介，只提供金融信息服務，一筆借款需求由多個投資人投資，同時由合作擔保機構提供擔保，雖然現在大多數P2P都采用該模式，但該模式的一對多卻有眾籌的影子， 但是央行已明確表態：P2P和眾籌分別歸中國銀監會和中國證監會兩個不同部門分管，二者監管的法律基礎也是不同的;再如宜信的創新債權轉讓模式：借款需求和投資都是打散重新組合，由宜信負責人作為最大債權人將資金借出，然后獲取債權對其分割，通過債權轉讓形式將債權轉移給其他投資人，獲得借貸資金，這樣的創新越過了證券 And if the loan amount is less than the transferred creditor's rights, it belongs to the illegal fund-raising category.

　　 Chaos three: breaking the bottom line of financial regulation and regulation

This kind of chaos usually appears as follows:

First, take the name of Internet finance to conduct private lending.

Up to now, China's registration requirements for the establishment of the P2P network lending company are consistent with those of the general Internet Co registration system, that is, the registration is first made according to the relevant regulations of the Company Registration Ordinance, and then in accordance with the "Internet information service management measures" and the "Internet website working rules" in the communications management department for the record, and the approval of the software used. China's registration requirements for private lending companies are much more stringent than those of P2P lending companies. The general private lending companies need to go to the CBRC for permission. As a result, many private lending companies exist in the form of P2P network lending companies. Therefore, on the whole, the P2P lending industry in China generally exists in the name of Internet finance, which is the practice of private lending. On the one hand, it circumvents the country's control over lending rates, and on the other hand, it also avoids the market access problem, but adds a lot of uncertainties to the entire financial market. The prominent problem is self financing, that is, the fund users set up a network platform to finance themselves. For example, at the end of last year, the credit card which was closed down, issued 363 loans in 4 months, and according to the information of the Public Security Bureau, the loan signs issued by Youyi online were fake, and 90% of the funds went into their own pockets, and the responsible person has been arrested. Recently, Tianli loan, net win world and copper capital loan were also suspected to be self financing. Subjective desire is not fraud, but financing for its own physical enterprises. This is the civil usury that is draped in the P2P coat. So chaotic, so that investors have issued a "trampling people's heartache course: 2013 of the ten wave of collapse."

2. In the name of Internet finance, we should conduct illegal fund-raising.

With the rapid development of Internet finance, the legal risks involved also begin to emerge. For example, at the beginning of 2013, Mei micro media held a stock raising scheme at Taobao store. Buying membership cards was to buy the company's original stock, the unit voucher was 1.2 yuan, and the lowest subscription unit was 100, that is, investing 120 yuan to become the original shareholder of the US micro company, holding 100 shares of the US micro company. Eventually, the company received two rounds of financing, and thousands of people bought it. The amount of financing amounted to about 1200000 yuan. Subsequently, the United States micro media for alleged illegal fund-raising, was quickly stopped by the SFC. Judging from the existing laws, according to the provisions of the securities law, the issuance of securities to a specific object or the issuance of securities to a specific target amount to more than 200 persons are all public offerings, which need to be approved by the securities regulatory authorities. In addition to equity raising, there are quite a number of false borrowers on the P2P platform to issue a large number of false target raising funds, which means that the financing side is using the P2P platform to carry out illegal fund-raising activities, while the P2P platform does not examine or know, should know and not stop. In this case, the P2P platform is equivalent to assisting the false financing parties to complete the illegal fund-raising behavior.

Internet banking is the name of Internet finance.

The "non-financial institutions' payment service management measures" stipulates the anti money laundering obligations of the third party payment institutions. The payment institutions' anti money laundering and anti terrorist financing management measures also provide detailed provisions on the supervision and management responsibilities of the anti money laundering and anti terrorist financing institutions that receive payment of business licenses. However, there are still third party payment agencies who knowingly break the law and help lawless money laundering. For example, the www.fun88.com gambling game in Jiangsu, the police found that all the Commission involved were imported by a Shanghai fast money payment company.

　　 Chaos four: Internet financial institutions are generally lack of risk control mechanisms.

The main features are as follows:

1. Internal management system

At present, many Internet financial institutions lack the consideration of the protection of customer information in the design of the internal management system, resulting in the risk of leakage of personal private information in the operation management process. For the third party payment institutions, according to the "non-financial institutions' payment service management regulations", the third party payment institutions have the right to require consumers to provide valid identity information and check their valid identity documents or other valid identity documents. At the same time, they register and retain the basic information of their customers' identity. They also have the obligation to safely and properly keep the basic information of customer identity, payment of business information, accounting files and other information. But in January 2014, Alipay was burst out with internal staff "divulge" more than 20G's massive user information, which is downloaded and sold by its internal staff, and Alipay's internal employees can steal such a huge amount of customer information, in the final analysis, there is a huge loophole in its internal management system. In daily life, our mobile phones, e-mail and other communication tools will occasionally receive advertisements for packaging and selling customer information such as "director and general manager information base" and "members you may be interested in". Internet financial institutions should effectively tighten up the pocket of customer information in the design of internal management system, and guard against the occurrence of infringing on customer information behavior.

2. Business process aspects

Most of the Internet financial companies are transformed from Internet Co, lacking professional management experience, lack of understanding of the risks of business processes, lack of control and control over the capital chain, and lack of experience in the mechanism of capital error and profit distribution. For example, the "www.hahadai.com" which was closed down in 2011 was due to the unreasonable design of the wrong period allocation mechanism and the lack of coordination of the fund problem. The www.zhongdaiw.com of the month of 2013 was also due to the lack of professional management ability of the whole management team, and no risk control mechanism was designed before carrying out the business. Table 1 is a part of the P2P platform that we have sorted out according to the data platform of the net loan home. From this we can get a glimpse of the wind control capability of the P2P network loan platform.

According to table 2, we can see that the average monthly turnover of -8 in January 2014 was 15 million 494 thousand and 900 yuan in the month of January 2014, and by the end of 2014, the registered capital of 14 (38%) of the 34 P2P platforms that had been closed down in Guangdong was less than 10 million yuan. Compared with the turnover of tens of millions of them, the leverage was very high, and the platform had a very high operational risk. Moreover, these grass-roots platforms did not have enough wind control capability to cope with the overdue loans of one or two large loans, which resulted in a large number of network loan platforms operating poorly, or even went bankrupt.

Technical safety aspects

At present, there are three main technical risks in Internet finance.