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JD Finance, ICBC in Latest Internet, Banking Collaboration

By Zhang Yuzhe and Liu Xiao
If the two company's account information can be combined, a powerful database of user information may emerge. ICBC currently has 550 million offline users serviced by 16,000 physical branches. JD.com has 240,000 active users, while JD Finance has 150,000 users. Photo: IC
If the two company's account information can be combined, a powerful database of user information may emerge. ICBC currently has 550 million offline users serviced by 16,000 physical branches. JD.com has 240,000 active users, while JD Finance has 150,000 users. Photo: IC

JD Finance and the Industrial and Commercial Bank of China (ICBC) are the latest pair to create a banking platform connecting the online and offline worlds.

Internet and banking tie-ups are not rare in China. On top of customer data sharing, largely offline banks are also able to reclaim customers who have grown accustomed to the convenience online lenders provide, while internet companies can expand into highly regulated retail-banking.

The online banking platform, called “Gongyin Xiaobai,” is the first project of a strategic partnership between JD and ICBC signed in June. During the same month, the Agricultural Bank of China and Baidu Inc. as well as the Bank of China and Tencent Holdings Ltd. also vowed to collaborate. Earlier this year, in March, Ant Financial Services Group, which owns online payment platform Alipay, announced a tie-up with China Construction Bank.

The platform will target the millennial generation, whose lives are increasingly dependent on online services, said Song Jianhua, head of ICBC’s retail banking department.

“We have to follow our customers, and bring bank branches to internet platforms,” said Song.

The new platform allows users to open an account with ICBC and request certificates of deposit online, services that were previously only offered in physical branches. In the future, the platform will offer more services and products including wealth management products, consumer finance, personal loans and precious metals, according to a public statement.

“We want to create an environment where customers can move seamlessly between online and offline services,” said Chen Shengqiang, CEO of JD Finance.

ICBC has financial data on users, while JD.com has customers’ internet usage data including their e-commerce habits, said Xie Jinsheng, head of JD Finance’s technology department.

“If these two sets of data can be combined, this can create a more complete picture of customers,” said Xie. The challenge, however, is how this can be achieved while protecting clients’ privacy, he said.

In fact, over the past five months since the strategic partnership was signed, one third of JD Finance’s technology department’s work load has been on how to connect accounts from JD.com and ICBC, said Xie.

“We cannot create an open financial service system by relying on ICBC’s own efforts and resources,” said Li Yunze, vice president of ICBC. “We must share customers, information and capabilities with external institutions,” he said.

Previously, ICBC’s online business was carried out through its own online platform, but now its products are embedded in JD Finance’s platform and in the future, JD Finance’s products will be embedded in ICBC’s online platform, an employee at a Beijing branch of ICBC told Caixin.

If account information can be combined, this could create a powerful database of user information. ICBC currently has 550 million offline users serviced by 16,000 physical branches. JD.com has 240,000 active users, while JD Finance has 150,000 users.

Contact reporter Liu Xiao (liuxiao@caixin.com)

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