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Loans processing for just thirty cents per application (thank you coders!)

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I enjoyed the LendIt conference in Shanghai, and wrote a few notes.

In particular, I enjoyed hearing the story of XWBank as told by Jiang Hai, the Vice Chairman.

His presentation was in Chinese but, from the simultaneous translation and slides, I picked up some interesting stats.

To begin with, I woke up because the translator said that Jiang called the bank “beautiful, small, dedicated and exquisite”. I haven’t heard many banks described that way so, at that point, I stopped playing The Enemy Within and started listening to what he had to say.

Now, I may get some of this wrong, but I think he said they were managing 40 million loans with a default rate of one in a million. That’s a bold kicking off statement.

They employ 8,000 different risk metrics to onboard customers using over 3,000 different customer profiling tools. That’s also bold.

Customers are onboarded fast. They just need to hold their ID against their face and take a selfie. And 99.6% of customers are approved for a loan and onboarded immediately – the average processing time for the whole approval cycle is 40 seconds – all driven by software.

That is why the loans offered in the DiDi app – DiDi is China’s equivalent of Uber – is a white label of XWBank’s systems.

Jiang finished his overview of the bank by saying that old banks will only offer a loan with a minimum 20,000-yuan (USD$3,000) value on a term of six months or longer. XWBank is happy to offer a loan of 2,000 yuan ($300) for a term of six days because it only costs them 20 yuan (USD$3) to process. Literally, it’s just thirty cents – less than a dollar – to process loan applications accurately thanks to their machine learning software system.

As he talked, it reminded me of what I heard about Ant Financial’s loans when writing the case study on them for Digital Human.

Ant Financial’s MYbank provides loans to Taobao merchants, Alibaba’s online shopping platform, ranging from 3 yuan (USD$0.50) to 56,000 yuan (USD$8,000) for as short a time as a few hours. This is why one particular Taobao merchant has had almost 4,000 loans in the last five years, an average of two loans a day!

MYbank has a slogan of 3-1-0, which is three minutes to apply for a loan, 1 minute to be approved and Zero human involvement, and they claim the cost of approving a small business loan can be as little as 2 yuan (USD$0.30), compared to at least 2,000 yuan ($300) at a traditional bank.

In fact, in prepping my pressie for LendIt, I found the staggering numbers that the Bank of China employs 310,000 people whilst Ant Financial employ 7,000. MYbank employs just 300 people, most of whom are coder technicians. Meantime, Ant Financial and the Bank of China have around the same market value ($150 billion and $167 billion respectively).

How the world is changing.

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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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