What is the difference between traditional finance and Internet finance?

Traditional finance, mainly refers to financial activities with only three traditional businesses: deposits, loans and settlements. The broad life cycle cost also includes the cost of use and abandonment that occurs after the consumer purchases. Simply put, finance is the financing of money.

Internet finance (ITFIN) refers to a new financial business model in which traditional financial institutions and Internet enterprises use Internet technology and information and communication technology to realize capital financing, payment, investment and information intermediary services.

Compared with the traditional amount and the Internet amount, the Internet amount has the following characteristics:

1, low cost

Internet financial model, the supply and demand of funds can be completed through the network platform of 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 financial products that suit them on an open and transparent platform, weakening the degree of information asymmetry and saving more 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, the business processing speed is faster, the user experience is better. Such as Ali microfinance relying on the credit database accumulated by the e-commerce, after data mining and analysis, the introduction of risk analysis and credit investigation model, merchants from the application for a loan to the issuance of only a few seconds, the daily average of 10,000 loans can be completed to become a real "credit factory".

3, wide coverage

In 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 more extensive. In addition, the customers of Internet finance are mainly small and micro-enterprises, covering some of the blind areas of financial services of the traditional financial industry, 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. Taking Balance Treasure as an example, Balance Treasure has been on line for 18 days, with the cumulative number of users reaching more than 2.5 million and the cumulative transfer of funds reaching 6.6 billion yuan. According to reports, the scale of balance treasure is 50 billion yuan, becoming the largest public fund.

5, weak management

One is 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 similar bank risk control, compliance and clearance mechanism, prone to various types of risk problems, there has been a crowd lending network, the net win the world and other P2P lending platforms to declare bankruptcy or stop services. Secondly, regulation is weak. Internet finance in China is in its infancy, there is no regulation and legal constraints, the lack of access thresholds and industry norms, the whole industry faces many policy and legal risks.

6, risky

One is the credit risk. At this stage, China's credit system is still not perfect, the Internet finance related laws are still to be supported, the Internet financial default cost is low, easy to induce malicious fraud loans, money run away and other risk issues. In particular, P2P lending platforms have become hotbeds for criminals to engage in illegal fund-raising and fraud due to the low entry threshold and lack of supervision. Since last year, Taogin Loan, Youyi network, Antai excellence and other P2P lending platforms have been exposed to the "road" events.

The second is the network security risk. China's Internet security problems are prominent, network financial crime can not be ignored. Once encountered hacker attacks, the normal operation of Internet finance will be affected, jeopardizing the safety of consumer funds and personal information security.