(1) Could MY bank’s big data and algorithmic approach identify good credit risksFor small loans without incurring the expense of multiple loan officers and
Bricks and mortar branches?

Big data removes the hassle faced on conventional marketing practices by center weightage and crowd analysis by data systems around the world. This data is mostly positive in predicting consumer behavior and is one of the best tools to predict right and potential markets for products.

The tool was reported the best for Indian banking industry as it yielded more consumers than it got in past 5 years i.e. total consumer count of 2 years was that of the consumers of 5 years.

In India, a logarithmic system known as the CIBIL ranking is used to determine the customer’s ability to get loans based on their credit performances which make it easy to process loans and take decisions by bankers.
MY bank’s big data and algorithmic approach identify good credit risks for small loans without incurring the expense of multiple loan officers and bricks and mortar branches
2.Was the rural customer base for online banking robust enough to create a
profitable program at scale?
Rural parts of china are still one of the most inaccessible places today and after usage of internet and advancement of communication systems enable banks to reach consumers online from rural places and this helps for both the sides for rapid movement of funds.

Capital fundraising for rural areas is quite a challenge to face because of transport issues and security issues and by the way of digital transactions, a person with an internet connection can work robust without worries from a stable place. This, all together resulted in creation of a profitable program at scale. In 2015 MY bank launched the Flourishing Farmer Loan program, of an effort to extend financial services to rural China. Because the bank’s program targeted customers who had no experience with banking, MY bank looked to determine credit-worthiness by using big data from internet transactions to create a nationwide credit-rating system for individuals and small enterprises. Credit scoring was new to China and the bank’s pioneering efforts could pave the way for economic development in rural areas.

3.What did MY bank have to do to make a national credit-rating system for
small enterprises successful?
In March 2014, Ant Financial received regulatory approval to create an online
Bank, MY bank. MY bank was among the first of five privately owned banks to be
Granted approval by the China Banking Regulatory Commission. Besides looking at models of private ownership, the regulators were evaluating the implications of online banking services. The China Banking Regulatory Commission welcomed new banking models that could increase available capital for private entrepreneurs and encourage economic growth in a way that the state-owned banks were not set up to provide.

Better access to credit could not only reduce the cost of loans forindividuals and small businesses but also expand the potential market for financialand internet services. MY bank was initially authorized to make loans, but not to accept deposits. Besides looking at models of private ownership, the regulators were evaluating the implications of online banking services. While cautious, the China Banking Regulatory Commission welcomed new banking models that could increase available capital for private entrepreneurs and encourage economic growth in a way that the state-owned banks were not set up to provide. Regulators were also eager to see if private banks could support economic growth in rural regions far from main cities.