Pre-loan: Customer acquisition favors attracting traffic

Since the opening of the first batch of consumer finance licenses for pilot testing 12 years ago, the industry has evolved from land grabbing to refined operations. Competition in customer acquisition, risk control, and scene segmentation remains fierce.

Today, building digital capabilities to improve business performance and achieve cost reduction and efficiency has become an essential choice for almost all consumer finance companies, and a key strategy for breaking through in the industry.

How well is digitalization in consumer finance progressing? Recently, Beijing Business Daily reporters surveyed 16 consumer finance institutions of different sizes, attempting to deeply review digital application scenarios across five dimensions: pre-loan, during-loan, post-loan, output, and inclusive finance.

Business Layout

In the early stages of consumer finance development, broad offline customer acquisition was common. As the industry evolved, more convenient and flexible online channels have become popular among consumer finance institutions.

◎ Online and offline integration becomes mainstream

Currently, in the overall business layout of the consumer finance industry, leading institutions like JieLian Consumer Finance and Industrial Bank Consumer Finance represent the main online and offline operation models, respectively. Their performance also ranks among the industry’s top.

100% focus on online operations

Gradual optimization of business layout

◎ Marketing moves away from manual dependence

Regardless of operational models, how to effectively acquire, activate, and expand customers remains a primary focus during the pre-loan phase for all consumer finance institutions. Based on feedback from surveyed institutions, their customer acquisition strategies differ depending on their online and offline presence, with platforms playing a key role.

Self-operated channels are gradually improving

Third-party traffic is the main customer acquisition method

Credit Review and Approval

In the pre-loan review process, the key challenge is how to accurately and thoroughly obtain borrower information to support credit decisions.

◎ Online-based qualification review

According to feedback from surveyed consumer finance institutions, after users submit relevant information through online channels, the system automatically assesses their qualifications. Even for offline operations, over 70% of consumer finance companies conduct reviews via online channels. The remaining companies combine “personal verification and visits” with online review steps to minimize manual intervention.

◎ Self-controlled credit marketing ecosystem

From the information provided by surveyed institutions, all 16 have built autonomous credit marketing ecosystems. Three institutions mentioned developing their own digital infrastructure covering the entire business process. Leveraging digital technologies like AI and big data, these institutions have added diversified risk control measures on top of “real-time decision-making and instant approval.”

Challenges in Business Development

Focusing on the pre-loan stage, all 16 surveyed consumer finance institutions identified online risk control as a key difficulty.

◎ Data asymmetry

“Credit novices” often lack sufficient data and key information, making it difficult to assess their repayment ability and creditworthiness. When extending credit to these groups, consumer finance institutions need to implement more comprehensive risk identification.

◎ Personal information and data privacy protection

Financial operations typically require collecting sensitive data such as ID cards, bank account numbers, home addresses, and contact lists, and involve organizing, analyzing, and sharing multi-dimensional data. With increasing attention to user privacy, consumer finance must handle data properly within legal and compliance boundaries.

◎ Catering to different audiences’ acceptance levels

Different social groups exhibit varying levels of digital financial literacy. The development of digital technology may create a “digital divide,” leaving some groups outside the digital finance progress and unable to enjoy the benefits of the digital economy.

◎ Lack of specialized, versatile talent

There is an imbalance in the availability of fintech talent, especially high-end professionals. Universities are just beginning to cultivate versatile talents, and it will take time to meet industry demand.