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XUANJI
Robo-advisory,
automated asset
allocation

dumiaoDigital
lendingtechnology

hongdianfun
Mutualfund
distribution

muffinsurer
Licensednational
insurance
brokerestifying to the rise of
China’s consumer class isa daily stream of Chinese
travelers hurrying throughairport terminals from
Paris to Palau with asuitcase in one hand andsmartphone in the other.
What’s inside each suitcase is, ofcourse, personal business. But an app
inside a growing number of traveler
smartphones is Pintec’s business.
Pintec is a consumer-savvy, fintech
services provider that builds bridges
connecting
enterprises,financialinstitutions, small businesses andthe upwardly mobile urbanites at theforefront of China’s transition to a
consumption-based economy.
The Beijing-based company’s statedcommitment to “leveraging technology
to advance financial services” while“leveling the playing field” underscoresa business model with a future as big as
the digital economy itself.
Pintec’s key app offers access tomillions of Chinese consumers who
now rely on mobile internet for varioustransactions by facilitating short-termloans and personal financing.
Pintec also pursues a “Powered byPintec” strategy by which seamless,integrated financial systems areavailable through a variety of online
platforms.
Fintech app users are generally
young adults raised in the internet
age who expect convenient, seamless
transactions. They order clothing
through e-commerce websites, bankonline, and tap smartphone screens toreserve airline seats.
Many banks, meanwhile, remain
grounded in brick-and-mortar traditions
that limit their ability to interact withthe smartphone generation.

Pintec serves both groups via its
ability to access and electronicallyprocess consumer background data –the “big data” that in the United States,for example, is managed by credit
agencies but in China is fragmented
and hard to collect. Pintec’s data-fueled“tech engine” gives banks the power
to weigh loan applicant risks before
issuing or rejecting credit.
Pintec is not a lender and assumes
no consumer-credit risk. However, bankloans arranged through its app Dumiao
Qianbao and Pintec’s digital loansystem for e-commerce companies help
consumers buy plane tickets to Paris,
Palau resort packages, and a lot more.
The “Powered by Pintec” tech engine
also drives credit inquiries supporting
smartphone sales at China Telecom
stores and student tuition payments
for Hujiang Education, an online
learning platform. Pintec also works
with e-commerce provider Tencent
Weidian, and backs the internet-based
Xinwang Bank by finding customers andmanaging risk.

As long as we
can collect data,
and the data
is rich enough,”
Wei said, “we cando what we wantto do.”In addition to credit support,
Pintec provides a robo-advisory
fintech service called Xuanji thathelps institutions and third-party
platforms offer automated investment
products to consumers by using
an asset allocation algorithm toexecute trades. The service, licensed

Who is using Dumiao?
Dumiao has partnered with dozens of major online
businesses in China, becoming one of China's largest third
party provider of digital consumer lending.

by the China Securities Regulatory
Commission, uses an asset allocation
algorithm to execute trades.
Pintec has grown rapidly since 2012,
when four friends with IT and financial
sector skills co-founded the company.
One founder, CEO William Wei, said
successful rounds of funding in 2014
and 2015 secured about $130 million.
By serving everyday consumers with
low-cost, manpower-light, easy-to-use
digital systems, Pintec occupies aunique position in China’s fintech sector.
“Most of the middle class isoverlooked” by fintech providers in
China, Wei said, and “a small part ofthe population (the wealthy) is overserved.”
Participating in Pintec’s wholeservice approach are Chinese online
travel agencies Ctrip and Qunar.com.,which supply some consumer data-- obtained with each consumer’spermission -- that helps Pintec ratecredit applicants for its banking
partners. Pintec collects allowable
user data from other sources, too,sponsored content

while building loan models andmanaging risk through its end-to-end
digital lending system. Pintec’sbank partners can thus issue credit
with confidence, while travel agents
benefit by selling tickets to the banks’borrowers.
Yang Miao, vice president of Qunar,said Dumiao cooperates with Qunar tosatisfy growing demand for travel andinstallment loans among young adults,
the agency’s largest client group.
No wonder Pintec is the now animportant player in China’s Online Travel
Agency (OTA) installment market, with as

FAST GROWTHFOR NIMBLE,
FORMIDABLEFINTECH

much as a 40% market share. To date,
Pintec has helped more than 5 million
consumers obtain more than 8.4 billion
yuan in new loans. The company plansto add OTA partnerships with travel
agencies Tongcheng and eLong, too.
The digital and financial know-howthat sparked the collaboration among
Pintec’s co-founders has been aspringboard for several ventures. For
example, the company recently launched
B2B partnerships with Minsheng
Securities, Harbin Bank and others.
Jin Kuihua, Minsheng’s vice president,
calls cooperation with Xuanji “a symbol”(Yuan bn)
30,000of his firm’s push for “products andservices on a strategic level.”Now, while adding services andgrowing to satisfy China’s risingconsumer class, Pintec is reaching out
to potential partners who recognize thevalue of a fintech sector leader with abig data edge.
CEO Wei says access to consumer
information and big data skills are
powering Pintec to lead the fintech
sector and achieve its goals.
“As long as we can collect data, andthe data is rich enough,” Wei said, “wecan do what we want to do.”Piin nnumbers
tec

40%

in China’s Online Travel
Installment (OTA) market
total: 25.1 tn yuan

25,000

total: 19 tn yuan, 75% mortgages

loans

15,00010,0005,000—

he internet’s incursion into
territories long dominated bybanks is accelerating in China
as financial technology firms
leverage computing skills to serve agrowing consumer market.
China is the world’s undisputed
leader in the “fintech” space, where
technologically adept companies with big
data access harness the internet to linklenders and other financial institutions
to consumers, small businesses andretail investors.
In a recent report, analysts led byKatherine Lei at J.P. Morgan in Hong
Kong heralded fintech as a “lucrative”
business opportunity in China, where
2016 consumer online borrowing
doubled from the previous year to about

consumers have obtained more than2010

2011

2012

Source: pboc, bloomberg inteligence75 billion yuan. This year, it’s expected
to double again to 158 billion yuan.
“We expect fintech to become a 460
billion yuan revenue market in Chinaby 2020,” Lei wrote.
A broad look at fintech’s role in
Chinese online banking by Bloomberg
analyst Francis Chan cited “continuedgrowth in online purchases” as fuelfor internet-based consumer lending.
Of the 25.1 trillion yuan in householdborrowing nationwide last year, hesaid, credit card and consumer loans
accounted for about one-fourth.
Nimble,cost-efficientfintech‘YOU NEED TO
FOCUS’market share

China’s householdand consumption loans

20,000PINTEC CEOWILLIAM WEI:

2013

2014

2015
Mortgages

2016
other consumption Loanscompanies also facilitate investments
including wealth management products.
Fintech companies earn fee income
without incurring the risks shoulderedby banks. And while they should avoid
competing against banks, Lei wrote,
fintech firms make excellent bankpartners.
Fintech is all about “enhancing
user experience and client acquisition,
reducing operating costs by leveraging
technology, and managing credit risks
by utilizing big data analysis,” Leiwrote. And it’s on the front lines of theinternet’s financial industry incursion.

Yuan in new loans to datewith pintec's help

partners withENTERPRISESFINANCIAL INSTITUTIONSSMALL BUSINESSES

conversation with bankers
about improving customer
satisfactionwasawatershed moment for
William Wei shortly before
he and three friends founded the fintech
services provider Pintec in 2012.
The conversation hit a dead-end
when Wei suggested executives fieldphone calls at a customer service desk
to “hear customer complaints,” he said.
“For those big banks, that wasimpossible.”Ever since, tech entrepreneur
Wei has directed his energy towardsatisfying consumers and providing
services beyond the reach of
traditional bank models. The successof Pintec’s Dumiao, China’s largest
third-party
providerofdigital
consumer lending solutions, as wellas its robo-advisor Xuanji prove he’son the right track.
A graduate of the Beijing Instituteof Technology and China Europe
International Business School, Wei cut
his teeth at Huawei, Nokia and Philips
before founding the telecom services
provider Innovation Technology Corp.
(ITC) in 2006.
ITC served firms such as China
Mobile and Nokia before being
acquired by VanceInfo. Wei served
as VanceInfo’s vice president formobile technology, then left to pursue
start-ups as an angel investor.
Wei fondly remembers chattingwith business school classmates wholater agreed to collaborate. And Pintec
was born.
“I was eager to find some newopportunities,” Wei said. “I strongly
believed that technology sales could
not survive. They had to be involved insome other industry. Something had tochange.”
Pintec’s first product was a creditrelated, data management system that
replaced paper records.
“With paper, you can never track thedata (or) customer behavior,” he said.
Banks have always been target
customers, Wei said, although earlyon Pintec chiefly served guarantee andloan companies.
Today, banks are assessing credit
risks and issuing consumer loans
through Dumiao, or working with Pintec
on B2B platforms. Meanwhile, Pintec ispursuing more bank and commercialclients.
But rather than try new businesses,
Wei said, Pintec will focus on internet
technologies serving the financial sector.
“Every day you need to focus, toconcentrate,” he said. “I hope I can help
the company stay calm, concentrate
and achieve our goals.”