Du Xiaoman Financial: From an Accessory to a Spotlight
Fintech companies have played a crucial part in the bank sector’s transformation
► 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.