Pre-loan: Customer acquisition biased toward traffic generation

Since the opening of the first batch of consumer finance licenses for pilot programs, it has been 12 years. From rapid expansion to refined operations, competition in customer acquisition, risk control, and scene-specific segments among institutions has never ceased.

Today, building digital capabilities to improve business performance and achieve cost reduction and efficiency has become an essential choice for almost all consumer finance companies, and a key strategy for them to break through the competition.

How well is digital transformation in consumer finance progressing? Recently, Beijing Business Daily reporters surveyed 16 consumer finance institutions of different sizes, attempting to deeply review the digital application status across five dimensions: pre-loan, during-loan, post-loan, output, and inclusive finance.

Business Layout

In the early stages of consumer finance development, broad offline customer acquisition was common. As the industry evolved, more convenient and flexible online channels have become popular choices for consumer finance institutions.

◎ Integration of Online and Offline Becomes Mainstream

Currently, in the overall business layout of the consumer finance industry, leading institutions like JieLian Consumer Finance and Industrial Bank Consumer Finance represent the main online and offline operation models, respectively. Their performance also ranks among the industry’s top.

100% Focus on Online Business

Gradual Optimization of Business Layout

◎ Marketing Moves Away from Manual Dependence

Regardless of the operation model, how to effectively acquire, activate, and expand customers remains a primary focus during the pre-loan phase. Feedback from surveyed institutions shows that, depending on their online and offline business layouts, each relies on different platforms for customer acquisition.

Gradual Improvement of Self-operated Channels

Third-party Traffic as Main Customer Acquisition Method

Credit Review and Approval

In the pre-loan review process, the key is to accurately and fully obtain borrower information to support credit decisions.

◎ Online-Based Qualification Review

According to feedback from surveyed consumer finance institutions, after users submit relevant information through online channels, the system automatically assesses their qualifications. Even for offline operations, over 70% of consumer finance companies conduct reviews via online channels. The remaining companies combine in-person verification and interviews with online review steps to minimize manual intervention.

◎ Self-controlled Credit Marketing Ecosystem

From the information provided by the surveyed institutions, all 16 have built autonomous credit marketing ecosystems. Three institutions mentioned developing their own digital infrastructure covering the entire process of consumer finance operations. Leveraging AI, big data, and other digital technologies, these institutions have added diversified risk control measures on top of real-time decision-making and instant approval.

Challenges in Business Development

Focusing on the pre-loan stage, the 16 surveyed consumer finance institutions identified online risk control as a major difficulty.

◎ Data Asymmetry

“Credit novices” often lack sufficient data and key information, making it difficult to assess their repayment ability and creditworthiness. When extending credit to these groups, consumer finance institutions need to implement more comprehensive risk identification.

◎ Personal Data and Privacy Protection

Financial operations typically require collecting sensitive information such as ID cards, bank account numbers, home addresses, and contact lists, as well as organizing, analyzing, and sharing multi-dimensional data. With increasing attention to user privacy, consumer finance must handle data properly within legal and regulatory boundaries.

◎ Accommodating Different Audience Acceptance Levels

Different social groups exhibit varying levels of digital financial literacy. The development of digital technology may create a “digital divide,” leaving some groups outside the digital finance progress and unable to enjoy the benefits of the digital economy.

◎ Lack of Professional and Multidisciplinary Talent

There is an imbalance in the availability of fintech talent, especially high-end professionals. Universities are just beginning to cultivate multidisciplinary talents, making it difficult to meet demand in the short term.

(Editor: Ma Jinlu HF120)

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