In MYbank, which is a financial member of the e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA) is at it again to support the small- and medium-sized Chinese enterprises. In many cases, the small businesses have always been faced with challenges when it comes to obtaining credit from major financial institutions. This will not be the case anymore with the latest MYbank’s strategy.
However, due to the regulatory concerns over the facial recognition that MYbank wants to use for verification of identities, it is not possible to open accounts as yet. As such, the bank will only accept deposits once the facial-recognition is approved. After this, customers can now be allowed to open remote bank accounts.
Stressing on the need for MYbank, its Executive Chairman, Eric Jing, said that its core objective is to give affordable loans to boost the small and micro enterprises. Further, its interest is not on the rich people but on those little guys who cannot afford banking services from bigger and established institutions.
And what is the biggest secret with MYbank? While SMEs are currently being faced by tight Credit conditions, the bank will have lowered online operating overheads that will go a long way to offering more competitive interest rates.
Farmers and smaller businesses will be the biggest clientele for MYbank as a result of being avoided by State-owned banks. They have little or nothing to offer as collateral and are being considered as not being worth credit.
As such the internet bank that will be operated entirely on the cloud has taken upon itself to make, these people credit worth. At the same time, it is now becoming a threat to China’s big state-owned lenders.
Meanwhile, various analysts have stated that MYbank is likely to face numerous challenges. Credit costs will be the major one according to a bank analyst at Macquarie, Matthew Smith.
However, Jing is still holding up to the idea despite being asked to drop the idea by a majority of people who cited that he did not any quantifiable knowledge about the internet.