Text|Xiao Ya
Source | XiaoxiangFin
On April 10, Sheng Songcheng, the former director of the central bank, proposed that the blockchain should not be combined with currency, but can be related to finance, but it should not be too important, and should be applied to real products.
Following the launch of blockchain projects by giants such as Google, Microsoft, IBM, and Amazon, domestic giants such as BATJ, Qihoo, and Huawei have also released blockchain white papers and projects.
According to relevant research data, 41% of the projects invested in the first quarter of 2018 were blockchain projects, and capital was very willing to blockchain projects, and the investment rate in the quarter was as high as 92%.
The blockchain is hot and has attracted widespread attention from all walks of life. The current application projects are roughly divided into two camps. On the one hand, giants of various industries with obvious "centralization" characteristics are the core, and they are competing to deploy the blockchain; Team, the two form a rivalry. The irony of the situation is that apart from the fact that the original monopoly companies can make some achievements in this industry, few projects have actually landed in the financial field. However, if a centralized company does a "decentralized" blockchain, will it eventually lead to the birth of another Big Mac?
DCC is an exception (its full name is Distributed Credit Chain), which belongs to the entrepreneurial camp. Not long ago, DCC reached a cooperation with Yueche.com, a top domestic car loan Internet service provider, to enter the consumer finance market for vehicle buyers. The landing of DCC added a touch of joy to the entire industry, and at the 2018 Langbei Summit, DCC founder Stewie Zhu claimed to reshape the global credit system, cut into the credit field, and transform the banking industry.
In this new global credit reporting ecosystem, each user has the autonomy of their own data and the value ownership of data sharing. Inclusive finance that cannot be achieved by mutual funds is expected to be realized. Without the background of "Big Mac", where does DCC have such a big confidence?
In the era of digital finance, the "quiet credit investigation" we encountered
The credit report here is a broad concept, which refers to all the data that records our credit information.
And we all know that having a good credit record is a plus for applying for a loan, especially in the relatively rigid fields of car loans and housing loans; we also know that it is best not to apply for and check the credit system of the People's Bank of China frequently, which will affect the Credit score; we also need to know that as of June 2017, there were a total of 133 corporate credit reporting agencies across the country.
(Figure 1: Credit investigation business of the four major companies with high market positions)
People who need credit will know that credit officers will ask questions about "white households" and "black households". These are two extreme situations in the credit field. Both situations are not conducive to their own loans. This kind of credit investigation is aimed at the central bank. In terms of credit information database; in fact, every corner of our life records our credit status. As long as something related to finance happens, the most familiar one is the Sesame Credit of “Ant Financial Services”, which is a typical Corporate credit reporting business. However, not all corporate credit reporting services will be reported to the central bank’s credit reporting system. JD.com Baitiao is a summary report, and does not report each consumption detail; Ant Huabei does not have access to credit reporting, but it may be reported overdue for many times; Micro-credit is a must for every transaction; and bank credit cards, not to mention bank credit cards, are an important object of credit supervision of core financial institutions.
Many times, we don’t know that we have been “quietly investigated”, but we don’t know our credit data ourselves, and we don’t have ownership ; although, this is not necessarily a bad thing, and the national regulatory authorities will also have regulatory measures . However, what if the private data held by others is leaked? In fact this is not uncommon.
From the great concern in the United States over Facebook's leakage of user data, to the fact that Baidu in China can sell privacy, and Alipay's annual bills casually allow users to authorize privacy, it can be seen that the Chinese people lack the concept of privacy. Although regulation can solve the problem, it still benefits large companies, and small companies struggle in the face of regulation. The system built by DCC using blockchain technology truly provides a fair and inclusive financial approach for small companies and everyone, and it is a good way to solve the problem.
Users do not have data autonomy, and the centralized financial system is gradually showing signs of fatigue
Expropriation of user information, but the user has no data autonomy, this may be the root cause of the user's always weak position in the credit system. In this environment, as DCC founder Stewie Zhu talked about the current state of financial credit at the summit, there are three big problems: high transaction costs for both lenders and borrowers, high interest rates due to lack of competition, and distortions credit status. One of the cores of finance is risk pricing. Due to the opaqueness of data and the problem of information islands, the limited availability of valid information affects the accuracy of risk pricing at financial supply chain ports. The core focus of the contradiction lies in the opaque credit system, which ultimately requires Small and medium-sized enterprises and individuals pay for this, resulting in unreasonable distribution of benefits and unfair use of resources.
1. The cost and efficiency of financial supply chain ports.
The main factors affecting the loan price are the cost of the loan, the cost of economic capital occupied by the loan, the degree of loan risk, the loan fee, the supply and demand of the loan, the term of the loan, and the borrower's financing cost from other channels. The opacity of information determines that borrowing money is a risky business, and it also determines the embarrassing situation in the credit industry that "the lender is the boss" before lending, and "the borrower is the boss" after the loan. The online lending industry such as P2P is more prominent, and many online financial platforms have also been achieved.
In the Internet finance industry, there was a time when the annualized interest rate exceeded 100%, and the annualized interest rate of some small and short-term loans exceeded 300%, and borrowers could not use the platform for financing because the cost would be higher. The risks caused by information asymmetry will make people with good credit pay for those who refuse to pay, because borrowers need profits to balance their possible risks and losses that they have suffered, which is extremely important for borrowers. unfair.
In terms of efficiency, borrowers are limited by their ignorance of their own credit data and loan services, and need to rely on financial intermediaries. The whole process will lead to loss of efficiency. On the whole, it is still a seller in the credit field. market.
2. Credit evaluation of credit infrastructure
(Figure 2: 2010-2020 China Personal Credit Information Market Scale Forecast)
The huge personal credit reporting market has led to many credit reporting agencies. For example, the corporate credit reporting section is led by Ant Credit Reporting, and the personal credit reporting section is represented by Qianhai Credit Reporting and Ant Credit Reporting. Letter standards are not uniform. And finance is an industry that eats data, especially in the credit field. Relevant data may include sensitive data such as personal cash flow, health, and call records, as well as a large number of industry information sharing mechanisms, including financial industry blacklists, long-term lending/insurance risks, case information, vehicle information, etc.
There are two major problems in the current credit evaluation field: first, different data are collected by different institutions, resulting in repeated collection of the same information; second, the information collected by various institutions is not shared and interoperable, and the industry holds massive data Giants must be reluctant to share core competition barriers, and sharing data across industries is even more difficult. There is no obvious benefit and user privacy may be leaked. Organizations must be reluctant to take risks, which will lead to overall inefficiency. This forms an information island, which makes the cost of information verification relatively high; and the other borrower can also make loans on multiple loan platforms, which may lead to the possibility of multiple loans.
Focusing on user data autonomy, DCC builds a "global credit ecosystem" infrastructure
The biggest cost in inclusive finance is the cost of transaction risk. The current common measure is to borrow the power of "central institutions", such as the central bank's unified credit information system and the self-built credit database of large enterprises, mainly relying on scattered data to try to build a clear User profile. Based on their own interests and the perspective of protecting user privacy, it is difficult to share data between central institutions and it is easy to leak user information. Certain technical and resource barriers in the industry are one of the main reasons for the current high credit cost.
In the field of credit, many companies are making similar attempts. For example, LinkEye is committed to the credit reporting alliance, and Ripio, Jibrel, SALT, ETHlend, Lendroid, etc. are all trying to reduce the existence of central institutions. However, DCC really took the lead in realizing the landing. Its ideas mainly revolve around the autonomy of user data, and it is carried out from two aspects: first, to solve the problem of data ownership and possession of traditional central institutions; Financial transactions in the industry” are cumbersome processes.
The distributed banking public chain DCC mainly connects many financial service providers through a peer-to-peer system constructed by using blockchain technology, and mainly solves the current industry pain points from the two aspects of "credit report" and "lending process". , so that the goal of "global financial inclusion" has a certain possibility of realization.
1. Ownership design of credit report.
This model mainly considers the efficiency of lending and the security of data, and involves three key factors: ownership of data information, smart contracts, and DCC servers. Users on the chain all have a unique DCCID and a corresponding private key. The ID stores your real name, bank records, property analysis, history of assets and liabilities... and your credit history Such as loan application, repayment, etc., these are all managed by users themselves, that is, users have ownership of their own data, with the continuous upload of information, a complete virtual digital credit body can be formed, and all records cannot be tampered with. This is one of them, about the ownership of the data.
The second is about smart contracts. When there is a loan relationship or other needs to check the credit record, the system can automatically sign the contract, which will be conducive to the storage of the contract and expand the scope of information use, and this series of behaviors will generate new information to continue On the chain, rich ID content.
The third is the DCC server. Just as DCC is positioned as a credit infrastructure in the blockchain era, DCC plays a service-oriented role, authorizing credit in DCC.
In this way, the data ownership problems and efficiency problems of "quiet credit investigation" that we are worried about are easily solved.
2. The loan process is simplified.
To achieve "decentralization" through peer-to-peer lending, this is not just an ideal model. DCC has sufficient strength to support it. Technically, it is currently compatible with data (a number that lists tokens on Huobi). Data Authentication Protocol), ABS-based leading blockchain provider Deepfins, Beijing-Hangzhou blockchain led by the former Baidu R&D team, and Elastos, among others.
When individuals initiate and complete credit activities on DCC, such as applying for loans, repaying or even defaulting, the personal DCC data statement files will be updated and improved in real time. With additional financial transactions, users will eventually create more data points, building a comprehensive credit profile. It integrates credit records stored in different countries, regions and different languages under one DCC ID, enabling individuals or institutions to implement any financial scheme that requires credit data in a faster and more efficient manner.
In this middle, the traditional intermediary roles such as banks are eliminated. Banks may play more of a risk control and supervision role, and based on credit, the transaction process between borrowers and lenders is simplified, costs are reduced, and transaction efficiency is improved.
It is possible to trade on DCC, and the final win-win situation is like this:
Xiao Ming, a Chinese with good credit, needs a loan to renovate his house. The local borrowing rate is 9%. Through the data sharing of DCC, an institution far away in the United States discovered Xiao Ming's loan needs and verified Xiao Ming's good credit. , and finally lend it to Xiao Ming at an interest rate lower than 5%. Through the global free transaction in the credit field, both lenders and borrowers finally achieve a win-win situation.
The ideal is beautiful and the reality is getting closer, but there is still a certain order of magnitude difference between the reality and the goal, including the improvement of technology and the positive response of more participants. DCC has finally landed, but can the era of "quiet credit investigation" come to an end?
Xiaoxiang Lee: Focus on the financial and financial fields, especially Fintech, blockchain, etc. TMTPost was selected as one of the top ten authors in 2017, columnist for 70 media including TMTpost, Yiou, iDark Horse, and writer for many magazines such as Fortune Life.