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Analysis Aug 6, 2019 04:14 pm EqualOcean

Du Xiaoman's history of financial loss

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Jul 24, 2020 04:42 am · inpai.com

Du Xiaoman Financial Helps to Employ Over 3.3 Million People

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Jul 14, 2020 03:01 am · kaixian.tv

DuXiaoman Financial: Launches the Poverty Alleviation Program

Analysis EO
Analysis · 2
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Analysis EO
Jul 2, 2020 10:02 pm ·

A Closer Look at Du Xiaoman Financial: the Competition and the Future

► The Baidu-backed company still lacks core competitiveness among main players in the industry, such as Ant Technology and JD Digits. ► The encouraging potential in the entire fintech industry provides a lot of large room for Du Xiaoman to grow. In the previous article, we introduced the development path of Du Xiaoman Financial. Here, we explain its market position among the smart finance industry and go over its future opportunities in the consumer finance market.  The necessity of strengthening barriers among competitors In the to-B business competition, Du Xiaoman has certain advantages. Supported by the Baidu ecosystem and its technology base, the company outperforms competitors in terms of the traffic and data volume.  However, technology is what makes a real difference, and this has to serve the financial industry. The main players, Ant Technology, which is supported by Alibaba’s empire, JD Digits, which is backed by JD.com, and even the rising star – the Tencent Fintech – are all showing great interest in ‘AI+ Finance’, although with different entry points in the fintech industry.  Moreover, all of them have years of experience in finance with a certain number of successful commercialized projects and significant number of to-C clients. For example, Ant Technology and Tencent Fintech have an over 1 billion of individual client base, which way outperform than the figure of nearly 400 million for Du Xiaoman. Fair to say, in the smart finance field, Du Xiaoman still has a long way to go.  When looking at the valuation, there is a lot of room to grow for Du Xiaoman. Take Ant Technology and JD Digits as examples  – both are operating independently operating from former parent companies,  with valuations of CNY 1000 billion and CNY 130 billion respectively, overrunning the figure of CNY 20 billion for Du Xiaoman, according to Hurun Unicorn List 2019. In fact, JD Digits is already worth around CNY 200 billion after the change in ownership this June.  For financial institutions, technology is not the only factor for choosing a partnership. The database, the successfully commercialized projects and the individual client number are all crucial. For Du Xiaoman, the solutions and services are similar to other players that, who also have coverage on risk management, intelligent client attraction, smart client representatives. Therefore, deeply exploring more diversified services with differentiated products will be a way for Du Xiaoman to erect its barrier in the industry.  Future opportunities Though the competition is likely to get fiercer in the entire fintech field, the consumer finance and smart finance industries are still in their early stages. Seizing the opportunities in a timely way can also help Du Xiaoman to maintain its position or even grow larger.  The entire financial services industry is transforming into an online-based entity with more comprehensive supervision and systematic organization.  Financial services are moving online   The Chinese government stated the growth rate for small business loans from large commercial banks should reach 40% in 2020, which requires the banks to master their risk management capabilities. The higher requirements from the government is urging the banks to ask for third-party companies in technology support, especially in the credit review process, which was dependent on offline manual work.  This provides large opportunities for fintech companies, who run the business in consumer finance, such as Du Xiaoman, in many dimensions.  Because of the similarity between a small business loan and a personal loan, which are both high risk, with fewer or no collateral and hard to screen, consumer finance companies can provide experience-based business models and solutions for banks. Du Xiaoman, for example, has been focusing on personal credit services for years, along with technology screening solutions, which will play an important role in better promoting small business loan services to meet the government’s requirements.  Moreover, the formally manpower-driven credit review process requires large investments in labor but still has low efficiency. Fintech companies are adding fuel for banks in the technology transformation to the machine-reviewing process. Especially in the COVID-19 period, the ‘robotic callers’ from Du Xiaoman saved 30% of the labor costs for clients in March.  The increasing number of small businesses and the lower thresholds for borrowing also pushed up the demands for credit loan services.  Driven by the pandemic, people are spending more time online and have started getting used to it. Online investment and financing, another important business of Du Xiaoman, has significantly benefited from this trend.  The consumer finance services are gradually moving to the online space, where fintech companies are playing a crucial part. Financial Services are becoming more systematic  The increasing pressure on the regulatory side and the comprehensive application of high technologies are forming a more orderly financial industry.  The encouragement from the government on mass entrepreneurship has prompted a series of default rates, which will be more convenient for loan-providers such as Du Xiaoman. The central bank also increased the loan proportion for larger commercial banks to provide more fund support to small businesses.  What is more, the application of AI and big data makes the online credit system more controllable and efficient. Take ‘Panshi,’ an open platform of Du Xiaoman, as an example. The technology-based solutions on receivable collection help the financial institutions to save 40%-50% labor force, with the number of daily calls from robot callers similar to the figures from 300 human collectors’ daily workload. 

Analysis EO
Analysis · 2
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Analysis EO
Jul 2, 2020 09:52 pm ·

Du Xiaoman Financial: From an Accessory to a Spotlight

► After five years of deployment, Du Xiaoman has formed a business structure centered on AI-based personal credit and financing services, with several technology platforms opened and to-B solutions provided.  ► Du Xiaoman plays an important role in helping traditional banks to transform, lifting it to a valuation of over 20 billion and a ‘global unicorn’ status.  Du Xiaoman Financial, the fintech arm of Baidu, was established in December 2015 as a financial department with the name of ‘Baidu Finance.’ In late 2016, the personal financing and personal credit service was also launched, forming the remaining twofold structure of Du Xiaoman.  Based on AI and big data, the credit platform provides customized loan suggestions on different clients’ demands. It is now focusing on exploring installment loans in the education market. Backed by Baidu, Du Xiaoman possesses fairly good R&D capabilities, helping clients select among diverse investment products, including stocks, funds, insurance packages and other complex portfolios issued by large banks.  Du Xiaoman Wallet, a cash management platform, was developed to support the two main services, the personal credit and financing, also allowing clients to access various life scenarios, such as credit cards, utility and phone bill payments, food delivery service, gas services and movie tickets booking. The strategic cooperation with PayPal in 2017, which planned to explore the Chinese market through Baidu Wallet, now Du Xiaoman Wallet, marks a debut on the international arena.  Afterwards, the co-establishment of AI Bank with China CITIC Bank would also be a successful result for the company’s 2 years of deployment. AI Bank is a small financial institution operating in the microlending market with target clients among young people who want to start their own business and small businesses that need funds to scale up.   In 2017, Du Xiaoman started to explore the B2B market, with three platforms under operation:  > ‘Panshi’ (Chinese: 磐石 – ‘monolith’) focuses on antifraud supervision services. It debuted early that year and was opened to financial institutions later on. It provides one-stop customized solutions to banks on the entire credit loan process. The automatic model building product can significantly increase the efficiency for technician in building data computing and risk management models. The ‘Holmes’ system helps financial institutions with antifraud identification and credit assessments. As of the end of May 2020, the queries on Panshi had increased by over 50% from December 2019, and the company expects the figure to rise by 200% by the end of 2020.  > ‘Yunfan’ (Chinese: 云帆—‘cloud sail’), another open platform, is built around AI-based solutions on financial advisor and client acquisition, to help traditional banks transform to smart banks smoothly. The cooperation with Agricultural Bank of China was the first time Du Xiaoman applied its smart financial solutions to the traditional banking sector.  > Open blockchain platform ‘BaaS’ (Blockchain as a Service), is designed to help small businesses build their own blockchain systems. Along with this, the smart Asset Backed Securities (ABS) issuance platform allows businesses to issue ABS products based on blockchain. The first exchange-traded ABS product with blockchain-based issuance process launched as an SSE in September 2017. In 2018, the former financial department finally became an independent business, named ‘Du Xiaoman Financial.’ This year, the company started to actively cooperate with traditional banks, such as Bank of Nanjing, Bank of Tianjin, Harbin Bank and China Everbright Bank, in supporting risk management system building and intelligent financial advisor application.  In 2019, Du Xiaoman continued to upgrade and advance the business, and further explore to-B area. As of the end of 2019, the company had supported more than 50 banks with technology solutions, with loans exceeding CNY 500 billion, credited users reaching 330 million and the interest income surpassing CNY 10 billion. Now the company has formed a business structure with a main focus on AI-driven personal credit and personal financing services, and several tech-based platforms and to-B solutions provided.  In the bank sector’s transformation from traditional to Internet-based finance, and then on the journey to smart finance now, fintech companies have played a crucial part. As a main player in this field, Du Xiaoman has already done a lot and will do more.  we are following an article to take a closer look at Du Xiaoman's current position and its future.

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