"The biggest threat to Chinese banks’ cozy oligopoly may be in the hands of the nation’s consumers. Two online companies, Alibaba and Tencent, are making incursions into the country’s financial services market, providing an alternative to the capped deposit rates and sluggish service offered by the country’s big lenders. The disrupters are taking on risks, and savers should be glad.
Alibaba, the e-commerce group that just bought a 51 percent stake in the asset management company Tianhong for $193 million, is the banks’ main foe. By July, it had made over $16 billion in short-term loans to companies that sell goods on its sites. Its real-time records of borrowers’ cash flows and counterparties aid in lending decisions." Continue Reading