What risks may exist in Internet finance

With the increasing growth of Internet finance, the rapid growth of people's wealth, small and medium-sized enterprises to expand the demand for capital and other reasons, P2P, financial payments, investment and other Internet finance soaring, showing great potential for development. At the same time, the industry's survival of the fittest and self reshuffling is also accelerating, there are still many problems in the Internet finance industry, many non-compliant, non-qualified platforms still exist, but overall, the Internet finance industry is still in a positive, healthy and rapid development trend, the Internet finance and the depth of integration of various industries, the promotion of cross-border integration of traditional industries, restructuring and upgrading, and the formation of a new impetus for economic development still has a Significant significance. What are the problems of Internet finance, and how to solve them, the following is a detailed understanding.

1. Risk management mechanism is imperfect

The risk of microfinance mainly comes from two types: one is the integrity of the lenders themselves; the other is the security risk of the credit platform.

In China's current microcredit risks, most of them originate from the creditors' integrity and moral risks. Because of the weak control measures in this regard, strict control and repeated regular visits to review will increase the operating costs, and the entire financial industry and all aspects of our country lacks foreign personal integrity and moral risk in the life of the important impact, even a lifetime.

Additionally our lack of education in this area and the lack of strict punitive measures are the main factors that cause moral hazard, so personal integrity and moral hazard accidents occur frequently, bringing losses to the lender. Network security problems and information leakage are the main reasons for the formation of decreased security in the operation of funds, especially hacker attacks and phishing sites, etc., which may cause unnecessary losses.

2. Weak control of risks and weakening of sustainability

Due to the weak control of risk management mechanism, the operation method is not systematic compared with commercial banks, the content structure is not detailed, the operation method is not developed, and the system is not implemented. Although part of the credit companies have established a standardized, systematic credit system, operating procedures and business processes, but most of the companies still exist in the "pawnshop" image, not connected to the People's Bank of credit system, can not grasp the creditors in a timely manner to grasp the information and feedback on the injection of funds, can not make a comprehensive assessment system.

Additionally, the quality of practitioners is uneven, lack of professional knowledge, lack of experience in credit management work, timely feedback on the emergence of problems, analysis and treatment of the time lag, resulting in the lack of increased.

3. The policy outlook is unclear, the risk is obviously aggravated

Currently, China's laws and regulations on microcredit are fewer, effective supervision system with reference to the financial and banking services industry, which has resulted in the phenomenon of illegal private fund-raising frequently, only Wenzhou private fund-raising occurred in a number of cases. Because some of the microcredit company shareholders to the public fund-raising, while lending money in the name of the company, by the public and the media suspected of illegal fund-raising, so how to develop microcredit, how to understand the "microcredit companies restructured to set up a village bank Interim Provisions" and the implementation of how to compete with the commercial banks to compete positively and survive, are microcredit companies in the development of the difficulties.

In addition, compared with traditional formal financial institutions, microcredit companies, publicity and beautification of many problems, and even to deliberately exaggerated earnings, in order to capture the market, and produce "earnings upside down" of the phenomenon of vicious competition, so that investors, on the contrary, timid in their publicity. In order to prevent investment fraud or avoid risk, many investors choose traditional financial institutions of financial products, so that the real image of financial products in the Internet is over-publicity beautification distortion.

4. Uneven regional development, financing channels development space is blocked

In the country's provinces and municipalities of microfinance companies in the financing and borrowing balances, Zhejiang, Jiangsu, Guangdong, Shandong, Sichuan and Chongqing 6 provinces and municipalities accounted for 48% of the national loan balance. Tibet, Hainan, Qinghai, Gansu, Ningxia only 3.09%, playing a minimal role in the local economic development. The overall performance of the country's regional credit development is uneven, the southeast coast is the mainstream, the southwest Yangtze River Basin is developing rapidly, the northeast, north China compared to 2011 declined, the northwest continues to slump. This is basically consistent with the overall economic development trend in China, economically developed regions, the development of microcredit is strong, and vice versa.

At present, most of the companies in the country are only lending but not storing, shortage of funding sources, a small number of companies and national banks to carry out financing business or develop other financial projects, but in general, too few financial derivatives, a single channel of financing, from the point of view of the Quzhou to do the website to share the specific risk control process system of the cash loan, and now a lack of innovative ideas, and therefore, the space for development is hampered.

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