Lo­cal com­pany’s in­ven­tion helps to re­form fi­nan­cial sec­tor

China Daily (USA) - - IOT@ WUXI - By WANG WEI wang­wei2012@chi­nadaily.com.cn

While Chi­nese len­ders tend to be re­luc­tant to of­fer loans against move­able as­sets, a com­pany in Wuxi, Jiangsu prov­ince, claims it has found a so­lu­tion that helps to dra­mat­i­cally re­duce risks of fraud. The so­lu­tion is a fi­nan­cial net­work in­te­grat­ing in­ter­net of things tech­nolo­gies.

In Au­gust, World Sens­ing Net Group launched an IoT fi­nan­cial ser­vice plat­form, the first of its kind in the world, and said it could soon be used across the broad spec­trum of China’s fi­nan­cial sec­tor, from in­sur­ance to se­cu­ri­ties.

The plat­form gives len­ders more se­cu­rity on loans tied to move­able as­sets such as cars, ma­chin­ery or raw ma­te­ri­als, said Liu Haitao, WSN’s chair­man and a na­tional IoT chief sci­en­tist.

“Len­ders in China have been averse to lend­ing against these as­sets be­cause they are dif­fi­cult to mon­i­tor, and there­fore the risk of fraud or de­fault is higher,” Liu said.

Around 60 to 70 per­cent of short-term loans in de­vel­oped economies are made against move­able as­sets, but in China the per­cent­age is much lower.

The World Bank es­ti­mated that China has move­able as­sets worth 70 tril­lion yuan ($10.4 tril­lion) in to­tal, but the value of loans against move­able as­sets stands at only 5 tril­lion yuan.

As a re­sult, there is huge po­ten­tial for growth in this mar­ket in China, and WSN is con­vinced that its plat­form will give len­ders the se­cu­rity to re­lax their re­stric­tions on these kinds of loans, Liu said.

The plat­form’s IoT tech­nol­ogy en­ables len­ders to trace and mon­i­tor move­able as­sets in real time through a va­ri­ety of sen­sors, giv­ing the lender ac­cu­rate in­for­ma­tion about the as­sets at all times, he said. For ex­am­ple, a bank will be able to track a car which is be­ing used as col­lat­eral against a loan in real time, auto col­lat­eral loans, where it ap­plied IoT tech­nol­ogy for thor­ough su­per­vi­sion of ve­hi­cles.

Guan Yue­hong, the bank’s pres­i­dent, is op­ti­mistic about IoT tech­nol­ogy be­ing used in more fi­nan­cial sec­tors. “The IoT fi­nan­cial plat­form will be used in the fu­ture to reg­u­late bulk com­modi­ties, boost­ing the de­vel­op­ment of move­able as­sets loans.”

With the new plat­form, fi­nan­cial risks will be greatly lim­ited and banks will be more will­ing to ex­pand their busi­ness in mov­able prop­erty loans, hence in­creas­ing their rev­enue, Guan said.

Liu echoed her opin­ions by say­ing that the de­vel­op­ment of IoT fi­nance will also make it much eas­ier for small and medium-sized en­ter­prises to raise funds.

WSN de­vel­oped the IoT plat­form in col­lab­o­ra­tion with nine banks and an in­sur­ance com­pany, with the aim of cre­at­ing a plat­form that in­te­grates all kinds of fi­nan­cial ser­vices, in­clud­ing in­vest­ment, fi­nanc­ing and in­sur­ance, Liu said.

He said he also be­lieves that IoT tech­nol­ogy can trans­form China’s fi­nan­cial sec­tor even fur­ther. “IoT will pro­mote the de­vel­op­ment of China’s en­tire fi­nan­cial in­dus­try, giv­ing the coun­try a greater voice in is­sues re­lated to the global fi­nan­cial sys­tem,” Liu said.

PRO­VIDED TO CHINA DAILY

Liu Haitao (sec­ond from left), chair­man of World Sens­ing Net Group, demon­strates tech­nolo­gies to his team.

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