The People’s Bank of China (PBOC) will soon have access to the private credit information of hundreds of millions of users of Ant Group Co’s (螞蟻集團) online credit service, in a move signaling more regulatory oversight of the financial technology sector.
Huabei (花唄), Ant Group’s credit service, said in a statement that consumer credit data it has collected would be included in the Chinese central bank’s financial credit information database.
“The inclusion of Huabei’s credit information into the credit reporting system will help users’ credit information be more comprehensive,” Huabei’s statement said.
Consumers who do not authorize the sharing of credit data with the central bank would not be able to use Huabei’s service.
The move is part of various stricter regulations for Ant, which has been ordered to end its monopoly on information and behave more like a bank.
Ant Group, the financial affiliate of e-commerce giant Alibaba Group Holding Ltd (阿里巴巴), operates many digital payments, investment and insurance services, and has more than 1 billion users worldwide. In China, about 500 million people use its online credit and consumer loans services.
Financial regulators have grown increasingly concerned about Ant’s financial services business, abruptly halting its planned US$34.5 billion listing days before its stock debut.
Previously, Ant Group’s private credit-scoring system would assess a user’s creditworthiness. Those deemed trustworthy enough could use Ant’s credit and loans services, including Huabei, which was popular among consumers, as it gave them access to online credit in a country where it is difficult to get a credit card.
Ant Group would connect creditworthy users with banks that provided the credit, while taking a cut of the fees in the process. Banks were thus left to shoulder most of the credit risk.
Ant’s trove of customer data has long been seen as an important advantage for the company, allowing it to design financial products to suit its users.
Regulators have said that the firm has engaged in behavior that is anti-competitive, contravening regulatory compliance requirements and involved itself in regulatory arbitrage. Ant Group was ordered to hold minimum capital requirements as part of risk management measures.
Data such as a user’s credit lines, amount of credit used, repayment statuses and account creation dates would be shared with the central bank, while information such as individual purchases and transactions would remain private, Huabei’s statement said.
Huabei said it would strictly follow the regulatory requirements.
“The credit reporting system is the foundation of the country’s financial sector. As society progresses and improves, more and more users will come into contact and better understand credit reporting,” it said.
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