Ant Group has shared just a fraction of its consumer data with China’s central bank, defying intense government pressure to hand over more information after it was forced to pull its record $37bn initial public offering last year.
The data dispute is the latest front in a fight between Beijing and the financial technology group founded by Jack Ma, the country’s best-known entrepreneur, after officials halted the company’s IPO days before it was set to list in November.
Beijing’s intervention followed a speech by Ma in which he sharply criticised China’s regulators and state-owned banks. The billionaire, who previously founded ecommerce group Alibaba, has largely disappeared from public view since making the remarks. His fight with the authorities is the most prominent example of the growing tensions between the state and China’s private sector as President Xi Jinping seeks to exert tighter control over the economy.
The People’s Bank of China has long wanted to create a pool of credit data to help big state-owned banks assess creditworthiness as consumer loan defaults have increased.
The PBoC has also flagged concerns about the size of private companies such as Ant, hitting out at the “inappropriate collection and control of data” by “leading internet platforms that have abused their market monopoly”.
Ant is China’s largest holder of consumer credit data and its Alipay app is the country’s biggest payments platform. The company offers two consumer-lending products: Huabei, which is similar to a conventional credit card, and Jiebei, which offers small unsecured loans through Alipay.
Ant had agreed to provide some information to a state-backed database on the 500m customers who have taken out loans, including their personal identities, monthly borrowing amounts and debt repayment statuses.
But the company has shared little of its data and the PBoC is unhappy with its progress, according to people with knowledge of the matter.
Ant has blamed privacy laws, as users must give their approval before the company can send their information to the central bank and only a fraction have agreed to do so. China’s data protection standards require companies to obtain consumers’ consent on how they use their data, including passing it on to third parties.
But the PBoC is pushing companies to find ways to share data, such as requiring consumers to agree to data-sharing as a condition of using their services — a measure Ant is loath to implement for fear of scaring off customers, according to former and current employees.
Chinese officials have also complained of a lack of detail in the data Ant has shared and the frequency with which it does so. The group submits condensed transaction records, which only include an aggregate figure, once a month to the central bank’s Credit Reference Center, the official collector of individual and corporate credit information. But officials said the frequency was too low from a risk management standpoint.
“A person who borrows once a month has a different risk profile from a person who borrows 10 times,” said a former PBoC official involved in fintech policymaking. “The current data sharing schedule isn’t enough for us to figure out who is more creditworthy.”
Beijing has asked Ant for greater disclosure, with the PBoC calling data collected by internet platforms a “public good” that should be regulated more closely.
Ant has agreed to share its consumer credit data on Jiebei and Huabei with the CRC in a “step-by-step” manner, said people with knowledge of the situation.
Ant and PBoC declined to comment.
Ant began reporting some transaction data on Jiebei to the CRC as early as 2018, according to public records. The company also began sharing some data on Huabei shortly before the IPO was pulled.
Handling Ant’s data, however, poses a significant challenge for the PBoC, which lacks the expertise and technology to analyse it, said people familiar with the matter.
“While Ant has thousands of data scientists, we have a fraction of that number,” said a former PBoC official. “How do you expect us to understand and maintain what they have created?”
Another former PBoC official said: “No one has ever dealt with so much consumer finance data as Ant did. It requires expertise the central bank lacks.”
This is one reason some of Ant’s users have refused to share their data with the regulator.
“I don’t want to make my credit history at Ant available to the CRC as that may prevent me from taking bigger loans, like mortgages, from banks,” said David Wu, an office manager. “I have borrowed too many times from Jiebei and banks may see this as a red flag even though I have repaid my debt on time.”
Beijing’s attempts to take control of China’s privately held fintech data has led to criticism from analysts and industry participants that it could hamper financial innovation.
“Ant may become less active in collecting and analysing its user data if all of them end up in the hands of the government,” said Zou Chuanwei, an internet finance expert at Wanxiang Blockchain in Shanghai. “That could drag the industry down.”
Additional reporting by Qianer Liu and Yuan Yang