China’s New Lenders Collect Invasive Data and Offer Billions. Beijing Is Worried.
“But they don’t really know how to change that because the data is already being used.”
Mr. Bai of the China Association of Microfinance added
that “some cash loan companies use all kinds of soft violence to press customers to pay their loans back.”
Last month, Guangdong Province in southern China warned
that more than a dozen apps had security loopholes that allowed companies to steal user information.
Smart Finance uses repayment behavior data to help strengthen its credit rating system, “but
there is still a long way to go,” said Carrie Fang, a spokeswoman for Smart Finance
In November, the People’s Bank of China, the country’s central bank, stopped companies and people from starting new online cash lending platforms.
Last month, an internet financial association affiliated with the People’s Bank of China
announced plans to start a system that would crunch data from China’s big tech firms.
In a country that lacks reliable ways to tell who might be a good borrower, these lenders use artificial intelligence
and oddly personal data — like tracking how fast prospective borrowers type on their phones — to determine who will pay them back.