Alibaba’s Ant Group, which is being pressured by the Chinese government, is expected to turn over the financial information of 1 billion customers.
According to officials, Ant Group is in talks with a Chinese state-owned company to set up a credit information company – The company should be launched in the third quarter of this year at the earliest.
Companies providing credit information are known to be promoted as joint ventures. Moreover, according to a source, Ant Group and the supervisory authority are considering who should control and operate the joint venture. Authorities believe the joint venture should be operated by Chinese state-owned enterprises.
In this case, the Ant Group could give up some control over financial data. The group operates Alipay, China’s largest electronic payment service. Alipay is estimated to have over 1 billion users. “Ant Group’s success in recent years has been attributed to the information it has imported from its customers”, says an expert.
To assess credit, China’s central bank, the People’s Bank of China, collects loans from individuals and corporations. Nevertheless, it is impossible to evaluate the credit rating of people who do not have bank loans or loans. Due to this, the Chinese authorities argued that private companies should exchange financial information with the government. Companies such as Ant Group have their credit rating systems based on consumer financial information.
Besides selling micro-loans and investment products through the Alipay app, the group has a subsidiary called Jima Credit, which provides credit information.
Ant Group, however, has declined requests from authorities to share customer information without their consent.
Thus, some have believed that the pressure that began after Ma publicly criticized the authorities at the Shanghai Financial Forum at the end of last year was aimed at obtaining such information.
It was reported that behind Ma’s beating, there was a plan to force the group to share data – Data regulation is central to the case.
Ant Group changed its position, at least in part, as a result of the blatant interference from Chinese authorities, but reported that no decision had yet been made about what data the credit information company will collect.