Jan. 15th, 2019 /EqualOcean/ - Incepted in 2014, the Beijng-based Bairong (百融) Financial Information Services Co. Ltd. (formerly “100Credit” 百分点) - financial services and analytics technology provider - has been enlisted for the third time in “KPMG China Fintech 50” issued in Dec. 2018.
Risks are inevitable and the fundamental characteristics of the financial market. Through leveraging AI, Cloud Computing and Big Data (processing, analysis and modeling), Bairong provides efficient and safe solutions of precision marketing, credit check and monitoring, anti-fraud and other risk management services for banks, insurance, auto finance, micro-finance companies as well as other financial enterprises/institutions.
Although as a Unicorn less known by few individual customers than Ant Financial originated from Alipay, Bairong has been working with over 3500 clients - a surge from 600 within 2 years - which all help speak for its technology and services. In turn, the services and cooperation have helped it to amass the data of nearly 700 million individuals and over 20 million small-and-medium-sized companies.
In credit-rating and risk-control, it provides services and fintech support for the core businesses of over 300 banks including Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, Bank of Communications, Postal Savings Bank of China, China Merchants Bank, China Everbright Bank etc. In addition, nearly all licensed consumer finance companies in China use its tech support for intelligent decision-making.
Regarding insurance, it has been counted as a backer for several top-level commercial and life insurance companies, including People's Insurance Company of China, China Life Insurance, Pacific Insurance, Xinhua Insurance etc., to tailor their marketing and product design.
Given the remarkable success China has achieved in its universal financial inclusion over the last decade, an upgrade of the financial industry is underway while China is leading the new fintech paradigm.
As mentioned in the previous exclusive insights of the vice president with Bairong, the critical problems of financial inclusion that China is facing now can be better addressed with the help of fintech, including the lack of data due to short time frame, low profit margin and the challenges for modeling data.
With demographic dividend and the support of state policies, there are opportunities ripe for the picking. Bairong’s founder and CEO, Felix ZHANG (ZHANG shaofeng 张韶峰), once quoted from Homo Deus: A Brief History of Tomorrow, “people are usually afraid of change because they fear the unknown. But the single greatest constant of history is that everything changes.” While traditional banking and payment system feel threatened by fintech, the best way is to make the best of tech for a better financial ecosystem.
Felix - a Tsinghua grad - observed financial institutions’ risk-control demand for fintech coinciding with digitalization and mobile payments and the potential of better processed Big Data.
As the Chinese government began to purge the finance industry, new (but limited due to Chinese government’s tightening regulations) opportunities have emerged in the “To B” services apart from the dispersed and notorious Consumer Finance (e.g. P2P lending is afflicted with moral hazard and fraud) that has caused turbulence in the last few years.
Yet in 2017, Bairong also started its “To C” financial platform “Rongshu (榕树)” to provide selected financial products such as loans, credit card application etc. for individuals. In this way, it aimed to gather more data to provide better services in precision marketing and risk monitoring for its enterprise clients, so as to build and complete a “C to B” business loop. Though it self-claimed to become the “Tmall (天猫) for finance” in China, the fierce competition from Ant Financial and JD Finance - both targeted at personalized financial products - would make it difficult for Bairong to carve out a share in the "To C" playing field.
At Fortune’s Global Tech Forum in 2018, Felix phrased his opinions and put forward a division of the fintech industry into two areas: products versus infrastructure which is still and will be Bairong’s focus.
As he noted, by far, there was not an independent marketized credit assessment and rating authority, like Experian, Equifax, TransUnion and FICO in the United States. Indeed, regulatory restraints played a part. However, only a few can make it through the fierce competition and that’s where we’re headed with upside potential as the development of China’s financial inclusion is going to witness higher growth in the next decade.
In Apr. 2018, it secured its Series C funding of CNY 1 billion (USD 159million) led by China Reform Fund Management (state-owned) while Sequoia Capital China increased its holdings, with a conservatively estimated market valuation of USD 1 billion.
The state endorsement added to its further business expansion and a richer resource basis. Prior to the funding , Bairong launched the first fintech intelligent lab in China, attracting many experienced AI engineers for fintech innovation to guide China’s fintech know-how.
Bairong’s CFO, ZHAO hongqiang (赵宏强) once pointed out that Bairong's core competitiveness lied in multi-dimensionally integrated data and Bairong’s rich experience and legacy in providing services for a great number of banks and financial institutes. However, not everything in the garden is rosy. Whether its “To C” strategy can work as expected or it can continue its strengths remains to be seen, given the government’s regulation and competition from other fintech companies.
Fintech is buzzing on every level, but in the end, only a few big players will survive and be able to shape the landscape. It is estimated that the market for Fintech in China might exceed CNY 12 trillion (USD 1.7 trillion). Nevertheless, with the advantage of essential data accumulation, high-graded client resources, significant amounts of funding and an advanced R&D ecosystem, Bairong will surely remain ahead of the game in the future “To B” fintech playing field.
According to an anonymous informed source reported by IFR ASIA, Bairong is seeking U.S. IPO of USD 200-300 million this year.