In recent months, notable consumer finance companies like Zhaolian Financial and Industrial Bank of China Consumer Finance have released their performance reports for the first half of the yearThe data reveals a notable trend towards digital transformation, indicating that these firms are enhancing their digital services and risk mitigation strategiesThis commitment has allowed them to achieve balanced growth in scale, efficiency, and quality.

Experts have pointed out the myriad challenges facing the consumer finance sector this yearFactors such as economic fluctuations, changing market environments, and adjustments in the asset structures of financial institutions have contributed to these difficultiesNonetheless, several consumer finance companies have adeptly navigated these hurdles by dynamically adjusting their operational strategies and increasing their investments in cutting-edge technologies like large models, cloud computing, and artificial intelligence, thereby optimizing costs and enhancing efficiency within the industry.

The focus on technological innovation is pivotal in enhancing consumer finance services

The industry is actively advancing new productive forces, particularly in pioneering fields such as artificial intelligence, where these advancements are being leveraged to improve service quality and meet diverse consumer needs more effectivelyConsumer finance institutions are now demonstrating a trend of stable yet progressive growth owing to the capabilities provided by financial technology.

As of June 2024, Zhaolian Financial reported total assets of approximately 157.8 billion yuan and a net asset growth of 8.5%, showcasing robust developmentMeanwhile, Industrial Bank of China Consumer Finance continues to promote a dual approach of regional and product-based growth alongside online and offline coordination, enhancing its credit supply capabilitiesBy June, the total balance of loans reached 72.5 billion yuan, with total consumer loans exceeding 360 billion yuan, serving over 22 million clients

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Other institutions such as Nanyin Fabao and Ningyin Consumer Finance have reported significant increases in net profit, further reflecting the sector's resilience.

One of the standout innovations in the realm of technological advancements is the deployment of large models in the industryIn an era where artificial intelligence is evolving rapidly, consumer finance entities have recognized the emerging trends and are seizing the moment to innovateFor instance, Mashang Financial has introduced the "Tianjing Large Model" for retail finance, while Zhaolian Financial has leveraged its extensive technological foundation to roll out the "Zhaolian Wisdom Deer" and its second iteration, enhancing financial innovation through potent technological support.

According to Sun Lei, the Vice President of Mashang Financial, leveraging big data analysis and AI technologies allows consumer finance institutions to delve deeper into customer consumption habits and identify potential demands

This enables personalized financial products and services tailored to individual clientsRetail finance, as a direct consumer-facing financial sector, is distinguished by a larger customer base, more frequent transactions, and massive data volumes, enabling it to fully exploit the advantages of digitalizationMoreover, technological advancements encourage the online and intelligent transformation of retail finance, enhancing the convenience and efficiency of financial services.

In recent years, with the aid of digital capabilities, inclusive finance has significantly extended consumer finance services to a broader range of "long-tail" customer groupsThe intensified focus on expanding the reach of inclusive finance has effectively filled gaps in traditional financial services, while also increasing consumer purchasing powerThis has prompted consumer finance institutions to adopt differentiated competition strategies alongside traditional banks, leading to a multi-layered financial service ecosystem.

Mo Xiugen, Vice Dean of the China Inclusive Finance Research Institute at Renmin University, emphasized that digital development has notably lowered the costs and barriers associated with inclusive finance, thereby improving service efficiency and accessibility

Whether targeting urban residents or individuals from remote rural areas, those in need of credit can potentially access digital inclusive servicesIn the current landscape, consumer finance institutions utilize big data analytics to accurately assess borrowers’ creditworthiness, simplify loan processes, and reduce operational costs, further enhancing the allure of inclusive lending.

The push for customized inclusive financial services symbolizes the ongoing efforts of consumer finance institutions to advance digital inclusivityZhaolian Financial representatives noted that with the help of AI voice assistants, customers can perform self-identity verification and loan approval, effectively eliminating physical and temporal barriers to financial servicesFurthermore, to streamline the self-certification process, Zhaolian has innovated an industry-specific knowledge graph that tailors online services based on distinct user needs regarding financial products and funding timelines

To date, their self-service certification has been adopted by over 15 million customers, significantly lowering costs and even waiving interest for more than 120,000 clients.

Digital inclusion is improving the accessibility and precision of financial services for new citizens and sole proprietors, effectively addressing urgent concerns related to entrepreneurship and consumptionAs urbanization progresses in China, the challenge remains: how to ensure that new urban dwellers can both enter and establish themselves within the financial systemsHere, digital forces play a crucial role in propelling the development of consumer finance.

One new citizen, Fan Yali, exemplifies the benefits of digital inclusivityHaving moved from a small county to Zhengzhou, she founded Zhengzhou Root Logistics, mainly taking on courier and logistics tasksTo scale her operations, she invested heavily last year

While business challenges were managed, the pressure of daily family expenses grewYali shared with the reporter that a customer manager from Central Plains Consumer Finance had been promoting a reduced-rate activity right in the logistics parkShe discovered that the service, "You Card," provided high credit limits, low-interest rates, and dedicated managers without requiring documentationCustomers could easily apply for consumer loans right from their mobile phonesThe shift to digital services has considerably enhanced the availability of consumer finance.

According to a representative from Tianyancha Data Research Institute, new citizens often find themselves hindered by a lack of credit information and collateral, making it difficult for financial institutions to gain a clear picture of their financial situations when trying to access traditional financial servicesBy investing in digital inclusion, consumer finance institutions can establish data models and comprehensive risk assessment plans that meet the financial needs of new citizens effectively.

Currently, as digital inclusion accelerates, it enables consumer financial institutions to align more accurately with market demands

By hastening their digital development initiatives, these institutions can better harness cutting-edge technologies to refine service processes and enhance operational efficiency, ultimately offering more convenient and personalized financial servicesRural areas, communities, and other segments emerge as critical directions for consumer finance growth; through digital channels, consumer finance providers can more effectively capture and respond to user needs, delivering tailor-made financial services, thereby expanding their market share and ensuring sustainable business progress.

Another key aspect to consider is strengthening risk managementThe consumer finance industry possesses an extensive repository of data, laying a solid foundation for accelerated digital transformationEnsuring strong risk management in digital transitions is essential; strategies must align with the institutions' operational needs, technological capabilities, and risk control measures.

According to Sun Lei, the urgency of digital transformation stems from the finance sector's characteristics of high data density and stringent compliance demands

The financial industry places high importance on data security, reliability, and relevanceThus, digital transformations must incorporate robust security measures to maintain the sound operation of consumer finance business.

This year, consumer finance institutions have intensified their focus on digital governance and risk management frameworks, ensuring compliance while reinforcing the foundation for risk managementA representative from Haier Consumer Finance stated that in the domain of digital governance, utilizing advanced technologies such as artificial intelligence and big data governance enables precise management of business processes and real-time monitoring across various aspects including pre-loan reviews, enhancing efficiency while minimizing operational and credit risks.

The power of technology is increasingly being harnessed as an essential tool to secure financial systems and protect consumer rights

Du Yang, a researcher at the Bank of China Research Institute, noted that big data analytics can be employed to monitor transaction anomalies in real-time by compiling and analyzing vast volumes of dataFinancial institutions are able to create detailed user profiles by examining trade habits, geographical data, and device usageMoreover, artificial intelligence, particularly machine learning algorithms, continuously refine risk assessment models, identifying fraud patterns and generating alerts based on extensive data from various fraud cases.

In response to the industry's pressing demands for data security and compliance, consumer finance institutions have established strict data governance systemsThrough employing advanced encryption and access control measures, they successfully mitigate risks of data breaches and unauthorized accesses, forming a solid shield around user information security.

While enhancing digital risk management, the consumer finance sector must also focus on unlocking data value comprehensively to support steady industry progression