The State of Digital Banking in China: A Look at MYbank and WeBank

Source from vtv.vn

Digital banking has been rising in China, with MYbank and WeBank leading as two of the country's first privately funded internet-only banks. Backed by Ant Group and Tencent Holdings, these banks have leveraged their parent companies' massive user bases to expand their reach and offer innovative financial products and services to consumers and small and micro enterprises. However, recent reports have shown that MYbank and WeBank are experiencing some challenges, including a rise in bad loans and slower growth of their balance sheets. In this article, we will take a closer look at the state of digital banking in China through the lens of MYbank and WeBank, examining their current challenges and opportunities for growth.

MYbank: Rising Bad Loans and Slower Growth

MYbank, which is 30% owned by Ant Group, reported a rise in its nonperforming loan (NPL) ratio for 2022, which was 1.94%, up 0.41 a percentage point from the previous year. While this increase was within expectations, it reflects measures taken to help small and micro enterprises offset the impact of the pandemic last year. Despite the rise in bad loans, MYbank still posted higher profits and healthy liquidity metrics, indicating that the bank is still in good shape.

One of the challenges facing MYbank is the slower growth of its balance sheet. The bank's total assets increased by only 9.7% in 2022, compared to 25.5% in the previous year. This slower growth is likely due to increased competition in digital banking and a more cautious lending environment in China. However, MYbank has maintained a healthy capital adequacy ratio (CAR) of 17.2%, which is well above the regulatory requirement of 10.5%.

Despite these challenges, MYbank has continued to innovate and expand its product offerings. In 2022, the bank launched a new product called "MYbank Business Credit," which provides small and micro enterprises with a credit line of up to RMB 5 million (US$780,000) that can be used for working capital, capital expenditures and other business needs. This product has been well-received by customers, with over 80% of the credit line already being used.

WeBank: Similar Challenges, Different Approach

WeBank, which is 30% owned by Tencent Holdings, has also reported a rise in its NPL ratio for 2022, which was 1.47%, up 0.27 percentage points from the previous year. While this increase is lower than MYbank, it still indicates that the bank is facing similar challenges in terms of credit risk. However, WeBank has also posted higher profits and healthy liquidity metrics, suggesting that the bank is still performing well overall.

Like MYbank, WeBank has also experienced slower growth of its balance sheet, with total assets increasing by only 9.7% in 2022, compared to an increase of 20.1% in the previous year. However, WeBank has taken a different approach to addressing this challenge. Rather than focusing solely on lending to small and micro enterprises, WeBank has expanded its product offerings to include wealth management and insurance products, which have helped to diversify its revenue streams and mitigate the impact of slower loan growth.

One of WeBank's most innovative products is its "WeSure" platform, which offers consumers a range of insurance products, including travel, health, and pet insurance. This platform leverages Tencent's massive user base to reach a wider audience and has attracted new customers to the bank. In addition, WeBank has also launched a new product called "Wealth Management Connect," which allows customers to invest in wealth management products offered by banks in both mainland China and Hong Kong. This product has been well-received by customers, with over RMB 1 billion (US$156 million) invested in the first month of its launch.

Opportunities for Growth

Despite the challenges facing MYbank and WeBank, there are still opportunities for growth in the digital banking space in China. One of the most significant opportunities is the increasing demand for digital financial services among consumers and small and micro enterprises. As more people in China become comfortable using digital platforms for financial transactions, the need for digital banking services will likely grow.

Another opportunity for growth is the increasing focus on financial inclusion in China. Digital banks like MYbank and WeBank have reached underserved populations in China, such as small and micro enterprises and rural residents, who may not have had access to traditional banking services. As the Chinese government continues to promote financial inclusion and support the growth of digital banking, these banks will have more opportunities to expand their reach and serve new customers.

Backlinks

“疫情冲击下 网商和微众银行2022年不良率上升、资产负债扩张放缓”, Caixin, 30 Apr 2023, https://finance.caixin.com/2023-04-30/102041630.html

"Top Chinese Digital Banks Report More Bad Loans but Higher Earnings", Caixin, 03 May 2023, https://www.caixinglobal.com/2023-05-03/top-chinese-digital-banks-report-more-bad-loans-but-higher-earnings-102041890.html

“微众银行年营收354亿：税收贡献近50亿 腾讯持股33%”, Sohu News, 16 Apr 2023, https://www.sohu.com/a/667151401_430392 

Shocking Scan-and-Order Trend in Food Industry Sparks Privacy and Discrimination Concerns!

 

Many restaurants have embraced Scan-and-Order technology in recent years as a way to streamline ordering processes and reduce labour costs. Customers can use their mobile phones to scan QR codes and place orders without the need to interact with staff. However, while the technology offers convenience, it also raises concerns about privacy and discrimination.

A recent investigation by the Shanghai Consumer Council found that some well-known tea and fast food chains require customers to provide their phone numbers before ordering through their mini-programs. If customers refuse to provide their phone numbers on certain mini-programs, such as Coco and Shenda Cheng, they are unable to place an order. This has sparked debates about privacy and data protection in the food industry.

Many customers find the technology convenient, as it allows them to place orders easily and quickly. However, elderly customers are often left at a disadvantage, as the technology is typically designed with younger generations in mind. Some elderly customers may not be familiar with mobile phones or may not even have one. This can leave them feeling excluded and discriminated against, which is a significant concern.

Another issue with Scan-and-Order technology is the collection of personal information, such as phone numbers. Some restaurants require customers to provide their personal information to use the service, which puts them at risk of having their data leaked, sold, or abused. This is especially concerning given that many customers are notneedunawaredeof the potential risksofh providing their personal information.

Despite these concerns, some customers still prefer the convenience of Scan-and-Order technology. It allows them to place orders without the neewaiting in line or interacting with staff, savingime and hassle. Furthermore, businesses find that Scan-and-Order technology helps to reduce labour costs, making it an attractive option.

However, it is crucial that businesses consider the needs of all customers, including the elderly and those who are not tech-savvy. They must also handle customer information securely and transparently to protect their privacy. In addition, restaurants must ensure that they comply with the relevant data protection regulations to avoid legal issues.

In conclusion, Scan-and-Order technology is a convenient way to order food, but it also raises concerns about privacy and discrimination. Restaurants must use this technology responsibly and considerately to ensure that all customers can use their services equally and safely. This includes protecting customers’ personal information and considering the needs of all customers, regardless of their age or level of technological proficiency.

Designing the Best-in-Class and Secure Login with Verification for Payment and Digital Banking Apps

 

Introduction: With the rise in digital banking and payment apps, security has become a top concern for users and providers. The login process is crucial in ensuring secure access to these apps, as it provides the first line of defence against unauthorised access. A best-in-class login system should be easy to use, reliable, and secure. This article will discuss the critical components of a secure login system for payment and digital banking apps.

Critical Components of a Secure Login System:

1. Password Policies: A firm password policy is the foundation of a secure login system. Password policies should include a minimum length, complexity requirements, and expiry dates to ensure users create and regularly update strong passwords. Additionally, users should be prompted to change their passwords if there is any indication of a security breach.

2. Two-Factor Authentication: Two-factor authentication (2FA) provides an additional layer of security by requiring users to provide a second form of identification, such as a code generated by a mobile app or a fingerprint scan. It prevents unauthorised access even if the user's password is compromised. 2FA should be mandatory for all users to ensure the system's security.

3. Biometric Authentication: Biometric authentication, such as facial recognition and fingerprint scanning, is a more convenient and secure form of authentication. It eliminates the need for users to remember and input passwords, which can be forgotten or stolen. However, biometric authentication should be used with other forms of authentication to ensure maximum security.

4. Session Management: Session management is critical to ensure that users are only logged in for the duration of their session and are logged out automatically when idle or when they close the app. Additionally, sessions should be invalidated when users log out or change their password to prevent unauthorised access to their accounts.

5. Device Management: Device management ensures that only authorised devices can access the app. It can be achieved through device fingerprinting, which identifies and tracks the unique characteristics of a user's device. Additionally, users should be able to remotely log out of their account if they lose their device or if it is stolen.

6. Security Testing: A secure login system should be regularly tested for vulnerabilities and weaknesses. It can be done through regular security audits and penetration testing, which involves attempting to hack into the system to identify any faults. Additionally, users should be encouraged to report any suspicious activity or security breaches.

Design Considerations for a Best-in-Class Login System:

1. User Experience: A best-in-class login system should be user-friendly and intuitive, with clear and concise instructions. Users should be able to easily navigate the login process without being overwhelmed by too many steps or confusing instructions.

2. Accessibility: A best-in-class login system should be accessible to all users, including those with disabilities. It can be achieved through assistive technologies like screen readers and voice recognition software.

3. Branding: A best-in-class login system should be consistent with the app's branding and design. It enhances the user experience by creating a seamless and familiar interface.

4. Error Handling: A best-in-class login system should have robust error handling, with clear and concise error messages that help users identify and correct any mistakes in their login credentials.

5. Scalability: A best-in-class login system should be scalable and handle many users and transactions. It requires a robust and reliable infrastructure that can handle peak usage times without slowing down or crashing.

Backlinks：

World Economic Forum

Google News

The Impact of Algorithms on Chinese Gig Workers in the Platform Economy

 

As the platform economy grows, gig workers such as delivery riders and ride-hailing drivers have become emerging professionals in the internet age. They work tirelessly, navigating through busy city traffic to complete their tasks. However, algorithms are increasingly limiting their time. Customer ratings intensify the conflict between consumers and gig workers, making the platform economy even more complex and binding delivery riders more tightly.

Can waiting an extra 5 minutes solve the dilemma for delivery riders? How can we restrain the algorithms that cause harm to gig workers? Where do the rights of gig workers in emerging industries lie?

The platform economy is characterised by matching supply and demand through digital platforms, which rely heavily on algorithms to optimise their operations. These algorithms, however, have limitations and can only consider some of the complex variables that come with human decision-making. This can lead to unintended consequences, especially in gig work.

One of the critical challenges that gig workers face is the time limit imposed by algorithms. In the delivery industry, algorithms set tight delivery schedules, making it difficult for riders to take breaks or rest. They must complete a certain number of orders within a specified time frame, which can be highly stressful and physically demanding. At the same time, algorithms prioritise customer ratings, often used to measure rider performance. This creates a situation where riders are forced to prioritise customer satisfaction over their own well-being, leading to a misalignment of incentives between the platform, riders, and customers.

Moreover, customer ratings and reviews can create intense and unfair pressure on delivery riders. Many customers are impatient and intolerant of any delay, leading to poor ratings and negative feedback, even when the delay is beyond the rider’s control. This can lead to a significant impact on the rider’s earnings, as their ratings and reviews determine whether they receive future orders or not. The system creates a high-stress environment that can lead to burnout and adverse mental health effects for riders.

As consumers, we may feel frustrated when delivery riders take longer than expected to deliver our food. It is tempting to blame the rider and give them a poor rating. However, it is essential to recognise that these ratings significantly impact the rider’s income and working conditions. Offering a low rating may seem like an appropriate response to a delay, but it can cause significant harm to the rider’s livelihood.

The algorithm-driven platform economy has created a complex and challenging work environment for gig workers. However, it is essential to recognise that gig work has always been difficult, even before the advent of digital platforms. The gig economy has grown in response to changes in the labour market, including the rise of part-time and flexible work and the increasing demand for low-cost services. However, the platform economy has exacerbated the challenges faced by gig workers, creating new forms of exploitation and precarity.

To address these challenges, there is a need for a more holistic approach to gig work. Platforms must recognise their responsibility to protect gig workers’ rights and ensure their algorithms do not cause harm. There is also a need for stronger legal protections for gig workers, including the right to form unions and collective bargaining. Finally, consumers must recognise their role in supporting gig workers and not contribute to the toxic rating culture.

In conclusion, the impact of algorithms on gig workers in the platform economy is a complex issue that requires a multi-faceted approach. While algorithms can optimize the operations of digital platforms, they can also create harm to gig workers.

算法对互联网零工的影响

随着互联网经济的发展，外卖员、网约车司机等成为互联网时代的新兴从业者。他们争分夺秒，在城市车水马龙中穿梭。然而，算法限制了他们的时间，评价好坏也加剧了消费者和零工之间的冲突，使得互联网经济变得更加复杂，更加绑缚外卖员。

多等5分钟能否解决外卖员困境？如何制约对零工造成伤害的算法？新兴行业从业者的权益应该如何保障？

互联网平台经济通过数字化平台来匹配供需，其运营很大程度上依赖于算法的优化。然而，这些算法也存在局限性，无法考虑到所有与人类决策有关的复杂变量。特别是在零工经济的背景下，这可能会导致意想不到的后果。

零工面临的一个主要挑战是算法所限定的时间。在外卖行业中，算法设定了紧张的配送时间表，使得外卖员难以休息或休息不足。他们必须在规定的时间内完成一定数量的订单，这会带来极大的压力和身体上的负担。同时，算法优先考虑客户评价，这通常被用作衡量外卖员绩效的指标。这就导致外卖员被迫将客户满意度置于自己的健康之上，从而导致平台、外卖员和消费者之间的激励错位。

此外，客户的评价和评论也会对外卖员产生巨大的压力和不公平的影响。许多客户心急，容不得任何耽搁，即使外卖员的延迟超出了其控制范围，也会导致差评和负面反馈。这可能会对外卖员的收入产生重大影响，因为他们的评价和评论决定了他们是否能够接到未来的订单。这种评价体系创造了一种高压的工作环境，可能导致外卖员疲劳不堪和负面的心理影响。

作为消费者，尽管我们也受到算法的影响，但我们应该认识到零工经济中的劳动者也在受到这种影响。我们需要意识到，他们不仅是服务的提供者，更是一群有权益和尊严的人类。因此，我们应该尝试采取措施来保护他们的权益，并为他们提供更好的工作环境。

一些可能的解决方案包括，扩大配送时间的设定范围，以便为零工提供更多的休息时间；制定更加合理的绩效评价机制，避免消费者的不公平评价对零工产生负面影响；增加透明度，公开平台算法的运作机制，促进平台工作环境的透明和公正。同时，政府也应该考虑出台法规，保护零工的劳动权益。

在这个日益数字化的时代，算法对于平台经济和零工经济的影响不可避免。我们需要承认这一点，并寻求平衡，以确保所有参与者的权益得到保护和尊重。

Backlinks：

Baidu News

Google News

Digital Yuan: The End of Paper Money in China?

Find out how China’s new digital currency works and how it differs from other third-party e-payment apps.

China’s Digital Yuan, otherwise known as electronic Chinese Yuan (e-CNY) or Digital Currency Electronic Payment (DC/EP), is a blockchain-based digital currency launched by the People’s Bank of China. Its value is equivalent to RMB bills and coins.

Source: Blockchain.news

Since the end of 2019, e-CNY has been piloting across cities like Beijing, Shanghai, and the 2022 Winter Olympics. Interested users of the e-CNY can register, and through a lottery, free online wallets containing 200 digital yuan (US$31.3) will be distributed to the winners. The winners will then be eligible to download and use the “e-CNY” mobile application (app) and join as a participant of the trial programme.

Source: Suzhou Bendibao

As the first digital currency launched by the Chinese government, e-CNY has attracted widespread attention both at home and abroad. While the government focuses more on the macroeconomic impact of the digital currency, ordinary citizens care more about its practicality. Today we will explore the e-CNY app to see how it works and consider how it might affect our daily lives.

Special note: as only the selected personnel can download and use this app, the following pictures are all taken from the internet.

How to use the e-CNY

1. Registration

Winners can download the e-CNY app through the official links, and iPhone users can use the given exchange code and download it through App Store. Upon successful installation, enter your phone number and name to complete the registration.

2. Deposit

Select a bank to create a sub-wallet. The available choices include China’s six major state-owned banks and Ali’s MYbank. Access to Tencent’s Webank is in progress. User can create multiple sub-wallets and top up e-CNY through the corresponding bank account.

3. E-CNY for physical payments

E-CNY is accepted as a payment method in most shopping malls, supermarkets, convenience stores, restaurants, and food markets in pilot cities. Merchants that accept this form of payment will have a label to show that e-CNY payments are available at the checkout counter.

Source: Reuters

There are three ways to make payments physically. Users can either:
1) Scan the merchant’s QR code
2) Show the user’s payment code, and the merchant can scan the QR code on the screen, or

3) Through the app’s “touch” feature, which allows two phones with the e-CNY app to transfer money by making physical contact or by touching the sensor provided by the merchant.

Source: Baidu.com

4. E-CNY for online payments

At present, e-CNY is integrated into Alipay and Jingdong, two of China’s most popular mobile apps. The six major banks also have their affiliated mobile apps such as Meituan, Bilibili and SF Express. Users can click “More” in the upper right corner and then select a sub-wallet to see other mobile applications that support the use of e-CNY. Upon turning on the access to an app, the payment option of “e-CNY” will be displayed in the chosen app.

Image by Suzhou Bendibao

For example, if a user turns on access to the Jingdong app, he or she can choose to pay in “e-CNY” when purchasing goods on Jingdong.

Source: Suzhou Bendibao

How is e-CNY different from third-party payment apps?

People who are used to e-payment tools may find this just like any other typical third-party payment. Is it just a government initiative to monitor the capital flow of ordinary citizens? Or is it an attempt to grab a share in the online payment market? These are some questions raised by the Chinese citizens. However, the e-CNY remains quite different from third-party payment apps. Simply put, third-party e-payment apps such as Alipay, WeChat, and PayPal, are e-wallets, while e-CNY is a currency. We shall dive into the five characteristics of e-CNY in detail.

1. National legal tender

E-CNY is China’s legal currency issued by the People’s Bank of China. Therefore, if e-CNY is implemented on a national scale, Chinese citizens have no rights to object. In contrast, third-party e-payment software does not have similar legal authority.

2. Increased anonymity

Due to strict control, Alipay and WeChat both require real-name authentication, with some functions that even require users to bind a bank account. For example, the “red packet” function in the WeChat group can only be accessed after binding the account to a bank card, regardless of the payment amount. On the other hand, e-CNY only requires the user’s mobile phone number and name for registration. Real-name authentication is not required for amounts under RMB 2,000 (US$312.5). Of course, as the amount increases, more personal information is necessary as this linked to the country’s crackdown on money laundering and tax evasion.

3. Available in Wi-Fi dead zones

Two mobile phones equipped with the e-CNY app can transfer money through the phones’ physical contact without needing any Wi-Fi signal. In addition, for merchants that have opened the “touch” function, users can make payments by touching the relevant sensors with their smartphones.

4. No need for a binding bank account

Although e-CNY currently requires users to deposit through a bank account, its existence and functionality should be independent of any bank. Third-party e-payment apps such as Alipay are different because they must access a bank card to function.

5. No fees and interest

A handling fee of about 0.1% is charged for cash withdrawal from third-party apps to bank accounts. Although some users enjoy no handling fee up to a fixed amount, this does not apply to everyone, and it makes third-party payment less attractive. To attract users, third-party apps usually will launch many financial products. Users can also get some interests if they deposit their money in those apps. E-CNY is different because it has no interest and no handling fee. It is purely a form of digital currency.

Effects of e-CNY in daily life

In short, e-CNY is the digitization of paper money, and its current focus is on facilitating day-to-day payments in the retail sector.

As the digital currency is still in its infancy phase, e-CNY and paper money are expected to coexist for a long time. For ordinary citizens, e-CNY adds to the plethora of payment options in China. Once implemented on a national scale, users no longer have to worry that merchants do not accept such a payment method or that digital payment does not go through due to Wi-Fi signal issues.

Short-term visitors to China will no longer need to exchange currency. E-payments can be made through e-CNY without real-name authentication, unlike other local payment apps that require a mainland ID card and bank account to use the app.

Chinese citizens are generally used to the convenience of e-payments. Common services such as bike-sharing and unmanned stores only accept digital payment methods. As e-payments are relatively common in China, the integration of e-CNY should not be difficult.

人民币数字化推出，纸币会在中国消失吗？

数字人民币是由中国人民银行推出的基于区块链技术的数字化货币，与人民币纸币等价。自2019年底，数字人民币相继在中国各地启动试点测试，包括北京、上海等数十个城市，和未来的冬奥场景。各地均以预约报名后抽签，发放红包给中签的消费者的方式开展试点。也只有中签的消费者能下载“数字人民币”APP并使用。

图片来源：Blockchain.news

作为第一个由政府推出的数字型货币，数字人民币广受国内外关注。与政府考虑它的政治经济等宏观影响不同，普通民众更关心它的实用性。今天我们来体验一下这款APP，看看该如何使用，以及对我们的日常生活有什么影响。
 
备注：因只有特定的人员才可以下载使用，以下图片全部来自于网络。
 
数字人民币的使用流程
 
1.     注册
 
成功中签的用户，可以通过相关通知链接来下载APP，其中苹果手机用户可以在APP STORE使用兑换码下载。下载成功后输入手机号、姓名即完成注册。

图片来源：苏州本地宝

2.     充值
 
选择一个银行来创建子钱包（目前支持中国的六大国有银行和阿里的网商银行：中国建设银行、中国工商银行、中国农业银行、中国邮政储蓄银行、交通银行，中国银行，网商银行暂时只支持查询余额，腾讯的微众银行正在开通中）。子钱包可以创建多个。创建成功后即可通过相应的银行卡充值。
 
3.     线下使用
 
数字人民币如今已经可以在试点城市的部分商场、超市、便利店、餐馆、菜市场使用。接受这种付款方式的商家店铺会在收银台进行相应的提示。

图片来源：Reuters

线下使用有三种方式：
 
1)      用扫一扫扫描商家的收款码进行付款；
2)      上滑手机界面，就会出示自己的付款码，商家使用设备扫描该码即可；

3)      数字人民币APP的“碰一碰”功能，让两个都装有该软件的手机通过触碰即可完成转账，或者手机触碰商家标牌的感应区即可付款。

图片来源：百度

4.      线上使用

目前该软件已接入支付宝和京东APP，另外，六大银行都有自己合作的APP，如美团、B站、顺丰等。点击右上角的 “更多”，然后选择相应的子钱包，就可以看到该子钱包支持的应用场景。选择向某应用场景推送子钱包后，在相应的APP的付款方式中就会显示“数字人民币”这一选项。

图片来源：苏州本地宝

例如，选择向“京东”推送子钱包，在京东APP购买商品时即可选择“数字人民币”付款。

图片来源：苏州本地宝

与第三方支付方式的区别
 
如果你已经使用过各款电子支付工具，你可能会觉得这款软件平平无奇。难道仅仅是政府推出来监管老百姓的资金流向？还是为了抢占线上支付的市场？简单的说第三方支付软件，比如支付宝、微信、和PAYPAL，是电子钱包，而数字人民币是钱。具体来看，数字人民币有以下五个特点。

1.     国家法定

数字人民币是中国人民银行发行的，是中国的法定货币，任何人、任何商家不可以拒绝使用。而第三方支付软件不具备这种强制力。

2.     适度匿名

随着管控的日益严格，支付宝和微信都需要实名认证才可以使用，某些功能甚至需要绑定银行卡才行，比如微信群里的红包，不论金额大小都需要绑定银行卡后才可以接收。数字人民币只需手机号和姓名来完成注册，目前人民币金额2000元以下无需实名认证。当然金额越大，要求提供的个人信息越多，这与国家打击洗钱逃税有关。

3.     可无网络支付
 
数字人民币的碰一碰功能，即使在没有移动网络的地方，两个都装有该软件的手机通过触碰即可完成转账，此外在已开通该功能的商家，用户用手机触碰相关标牌的感应区即可付款。
 
4.     无需绑定银行卡

虽然目前数字人民币需要通过银行卡进行充值，但其存在是独立于银行卡的，。而支付宝等第三方支付软件必须绑定银行卡才能使用全部功能。
 
5.     无手续费无利息

如今从第三方软件提现到银行卡大约需要收取0.1%的手续费，虽然部分用户有一定的免手续费额度，但这一定程度上还是不利于人们通过第三方支付工具使用信用卡等。另一方面，第三方软件为了吸引用户，推出许多理财产品，人们如果把钱存放在该软件里，能得到一些利息。而数字人民币无利息无手续费。只是简单的钱。

数字化人民币对日常生活的影响

 
简而言之，数字人民币就是纸币的数字化，目前的重点也在于便利生活中的零售场景。在现阶段，数字人民币和纸币将会长期共存。对于普通老百姓而言，数字人民币丰富了日常使用场景，使用者不必担心商家拒收，也无需担心使用区域的信号问题。而短期来华的游客也将不再需要兑换钞票，无需实名即可使用电子支付。毕竟中国现在大部分地区已经习惯电子支付，没有的话会很不方便，有些设备甚至无法使用比如共享单车，无人超市等。