Pre-loan: Customer acquisition favors traffic generation

Since the pilot program for the first batch of consumer finance licenses was opened, it has been 12 years, transitioning from land grabbing to meticulous cultivation, with competition among institutions in customer acquisition, risk control, and scenario segmentation never dying down.

Today, enhancing business capabilities through digitalization to achieve cost reduction and efficiency improvement has almost become a must for all consumer finance companies, and it has become a key strategy for these companies to break through competition.

How well is digitalization in consumer finance doing? Recently, Beijing Business Today surveyed 16 consumer finance institutions of different sizes in the industry, attempting to deeply review the digital application situation in the consumer finance sector from five dimensions: pre-loan, in-loan, post-loan, output, and inclusive finance.

Business Layout

In the early stages of consumer finance development, customer acquisition was broadly conducted offline. After industry changes, more convenient and flexible online channels have become a popular choice for consumer finance institutions.

◎ Integration of Online and Offline Becomes Mainstream

Currently, in the overall business layout of the consumer finance industry, leading institutions such as Zhaolian Consumer Finance and Xingye Consumer Finance represent online and offline business models respectively, and their company performance is also among the best in the industry.

100% focus on online business

Business layout gradually optimized

◎ Marketing Free from Dependence on Manual Labor

Regardless of the operational model, how to effectively acquire customers, retain customers, and expand the customer base remains a major topic of consideration in the pre-loan business development phase for various consumer finance institutions. According to the feedback from the surveyed institutions, depending on their online and offline business layouts, each institution has its own focus in customer acquisition strategies.

Self-operated channel construction gradually improved

Third-party traffic is the main customer acquisition method

Review and Credit Granting

In the pre-loan review process, the challenge is to accurately and thoroughly obtain the borrower’s information and provide support for credit decisions.

◎ Qualification Review Mainly Online

According to feedback from the surveyed consumer finance institutions, after users submit relevant information through online channels, the system automatically assesses their qualifications. Even for offline businesses, over seventy percent of consumer finance institutions conduct reviews through online channels. The remaining consumer finance companies add online review steps on the basis of “in-person verification and visits” to minimize manual intervention.

◎ Autonomous and Controllable Credit Marketing Ecosystem

From the information provided by the surveyed institutions, all 16 consumer finance institutions have built an autonomous and controllable credit marketing ecosystem, and three institutions mentioned the establishment of digital infrastructure throughout the entire process of consumer finance operations. Relying on digital technologies such as artificial intelligence and big data, each institution has further increased diversified prevention and control measures based on “real-time decision-making and instant loan approval.”

Challenges in Business Development

Focusing on the pre-loan phase, the 16 surveyed consumer finance institutions have identified challenges primarily in online risk control.

◎ Asymmetric Data Information

“Credit invisible” individuals often lack sufficient data and key information, making it difficult to assess users’ repayment ability and credit level. When conducting credit work for this group, consumer finance institutions need to achieve more comprehensive risk identification.

◎ Protection of Personal Information and Data Privacy

Financial services often require the collection of users’ personal identification numbers, bank account numbers, home addresses, and contact lists, while also needing to organize, analyze, and even share multi-dimensional data. In an era where user privacy data protection is increasingly emphasized, consumer finance must properly use data under compliance.

◎ Balancing Different Audiences’ Acceptance Capacities

Different social groups may experience gaps in the application of digital finance, and the development of digital technologies might create a “digital divide,” isolating some groups from the digitalization process in consumer finance and preventing them from enjoying the benefits brought by the digital economy.

◎ Lack of Professional and Composite Talent

There is an imbalance in the spatial and temporal availability of financial technology talents, especially high-end talents, and universities are just beginning to cultivate composite talents, making it difficult to achieve a balance between supply and demand in a short time.

(Edited by Ma Jinlu HF120)

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