Chinese Internet Finance Credit Investigation Issue and Legal Countermeasures

Background

Big data credit investigation is often referred to as internet credit investigation or network credit investigation. Compared to traditional credit investigation agencies, the Credit Investigation Center of PBOC for example, has been widely used in the credit risk management of financial agencies.¹ By the end of May 2017, a total of 3,000 agencies had been connected to the database, which included relevant information of 926 million individuals, 23.71 million enterprises and other organizations, effectively solving the problem of information asymmetry and improving the convenience of public financing (Xinhua News Agency, 2017). However, it is difficult for the centre to fully collect information on the liabilities of people with debts outside financial agencies. To prevent the risk of credit default from moving across markets, industries or regions, it is necessary to cultivate some social credit investigation agencies outside the Credit Investigation Center of PBOC,² so as to build a diversified and comprehensive credit investigation system compatible with market demands (People's Bank of China, 2017). The big data credit investigation industry has been rapidly developing in China in recent years (Wang Qiang, Qing Sude & Ba Jieru, 2017). It is important to note that credit system based on the big data is only part of the Chinese credit information system, and it is still unable to replace the traditional credit information. For the complete evaluation of the credit status of a specific person, it is still necessary to combine the traditional credit report with big data, the credit report can then be completed. The importance of a credit system based on big data cannot be overemphasized nor can the importance of traditional credit reporting methods.

Big data credit investigation refers to the redesign of the, credit investigation model and algorithm by means of big data, cloud computing depth algorithm, mobile terminal, artificial intelligence and other new technologies. These then collect, sort, store and process the structured and unstructured data produced by individuals or agencies in the use of internet various services that then describe the “Portrait” of the credit subject and present the default rate and credit status of said subject, thereby forming the specific credit products and providing it to information users or directly applying it to a certain preset scenario (Liu Xinhai & Ding Wei, 2014). The establishment of credit investigation agencies in China and the acquisition of the corresponding licenses are bound by the Regulations on Administration of Credit Investigation Industry. Big data credit investigation activities in essence still fall within the scope of credit investigation business as defined by this regulation.³ However, compared to the traditional credit investigation system, it has its own characteristics and can be a useful supplement to the traditional credit investigation system (Shi Mingsheng, 2017).