What are the advantages and disadvantages of Internet finance compared to traditional finance?

The advantages and disadvantages are as follows:

1, low cost: the Internet financial model, the supply and demand of funds through the network platform to complete their own information screening, matching, pricing and trading, no traditional intermediary, no transaction costs, no monopoly profits. On the one hand, financial institutions can avoid the capital investment and operating costs of opening business outlets. On the other hand, consumers can quickly find suitable financial products on an open and transparent platform, weakening the degree of information asymmetry and saving time and effort.

2, high efficiency: Internet financial services are mainly handled by computers, the operation process is completely standardized, customers do not need to wait in line, business processing speed is faster, the user experience is better.

3, wide coverage: the Internet financial model, customers can break through the constraints of time and geography, looking for financial resources needed on the Internet, financial services are more direct, the customer base is broader. In addition, the customers of Internet finance are mainly small and micro-enterprises, covering part of the traditional financial industry's financial services blind spot, which is conducive to enhancing the efficiency of resource allocation and promoting the development of the real economy.

4, fast development: relying on the development of big data and e-commerce, Internet finance has seen rapid growth. Take Balance Treasure as an example, Balance Treasure is on line for 18 days, the cumulative number of users reached more than 2.5 million, and the cumulative transfer of funds reached 6.6 billion yuan. According to reports, the scale of balance treasure is 50 billion yuan, becoming the largest public fund.

5, weak management: weak wind control. Internet finance has not yet access to the People's Bank of China credit system, there is no credit information *** enjoyment mechanism, does not have a bank-like wind control, compliance and clearance mechanism, prone to various types of risk problems, there have been crowd lending network, net win the world and other P2P lending platforms to declare bankruptcy or stop services.

Weak regulation. Internet finance in China is in its infancy, there is no regulation and legal constraints, lack of access thresholds and industry norms, the whole industry faces many policy and legal risks.

6, risky: credit risk. At this stage, China's credit system is not yet perfect, the relevant laws of Internet finance are still to be supported, the cost of Internet finance default is low, easily induced by malicious fraud loans, rolled up and run away and other risk issues. In particular, P2P lending platform due to the low threshold of entry and lack of supervision, has become a hotbed for lawless elements to engage in illegal fund-raising and fraud and other criminal activities.

High risk of network security. China's Internet security problems are prominent, and the problem of network financial crimes should not be ignored. Once hacker attacks, the normal operation of Internet finance will be affected, jeopardizing the safety of consumers' funds and personal information security.

Expanded information:

Internet financial model:

1, crowdfunding: crowdfunding means mass funding or crowd funding, refers to the use of the form of group pre-purchase. The mode of collecting project funds from netizens.

2, P2P lending: P2P (Peer-to-Peerlending), i.e. peer-to-peer credit, P2P lending refers to the matching of money borrowing and lending through a third-party Internet platform, whereby people in need of lending can find people who have the ability to lend and are willing to do so based on certain conditions through a website platform to help lenders share a borrowed amount of money with other lenders. This helps the lender to spread the risk by sharing a borrowing amount with other lenders.

3, Third-Party Payment: Third-PartyPayment (Third-PartyPayment) narrowly refers to the non-banking institutions with a certain degree of strength and credibility, with the help of communications, computers and information security technology, the use of major banks to sign a contract with the way in which the user and the bank payment and settlement system between the establishment of a connection between the electronic payment mode.

4, digital currency: Bitcoin and other digital currencies represented by the outbreak of Internet currency, in a sense, more subversive than any other form of Internet finance.

5, big data finance: big data finance refers to the collection of massive unstructured data, through its real-time analysis, can provide Internet financial institutions with a full range of customer information, through the analysis and mining of customer transactions and consumption information to master the customer's consumption habits, and accurately predict customer behavior, so that financial institutions and financial service platforms in marketing and risk control have a target .

6, information technology financial institutions: the so-called information technology financial institutions, refers to the adoption of information technology, the traditional operational processes for transformation or reconstruction, to achieve the operation and management of a comprehensive electronic banking, securities and insurance financial institutions.

7, financial portal: Internet financial portal (ITFIN) refers to the use of the Internet for the sale of financial products as well as for the sale of financial products to provide third-party services platform. Its core is the "search and compare" model, the use of financial products, vertical comparison of financial products, the products of various financial institutions on the platform, the user selects the appropriate financial products through comparison.

Baidu Encyclopedia - Internet Finance