Zhang Jinliang, President of China Everbright Bank: Financial technology empowers the upstream and downstream automotive industry chain

This year, policies for the automobile industry have been implemented intensively, starting with the implementation of the "Notice on Adjusting Relevant Policies on Automobile Loans" on January 1, to the implementation of the "double points" policy to encourage new energy companies, and then to the relaxation of restrictions on foreign equity ratios in the automobile industry and the reduction of tariffs on auto parts and complete vehicles. The automobile industry has always been the focus of policy, public and financial institutions.

So, how do financial institutions participate in the automotive industry? To this end, on June 5, a reporter from 21st Century Business Herald interviewed Zhang Jinliang, president of China Everbright Bank. In an exclusive interview, he said that auto finance should not only focus on the car, but also on the upstream and downstream industrial chains of the car.

Zhang Jinliang

At present, China Everbright Bank has established a special auto finance business center, which is committed to providing full-chain, full-process and full-online financial services for the auto industry. In the future, it will also improve the quality of auto financial services through advanced financial technology such as the Internet, big data, cloud computing and artificial intelligence.

Build a complete automotive finance industry chain

"21st Century": As one of the earliest commercial banks to engage in auto finance business, how do you think banks should maintain their core competitiveness in auto finance business?

Zhang Jinliang: Auto finance should not only focus on the auto industry chain, but also on the upstream and downstream industries of the auto industry chain. For example, China Everbright Bank's "Full Pass" auto business analyzes the procurement, production, sales and consumption links in the auto industry chain, and integrates the various financial needs of different customers such as suppliers, manufacturers, dealers, and end users in the industry chain according to the flow of funds, logistics, and information, to provide a complete set of financial services.

From our own experience, to provide good auto finance services, we must first effectively integrate the bank's marketing, product, risk and other line resources to formulate the most appropriate plan for customers; second, we must cultivate professional auto finance business talents; third, we must strengthen in-depth cooperation with major automobile manufacturers, especially with domestic and independent brand manufacturers.

"21st Century": In May this year, China Everbright Bank established an automobile finance business center. Why did you consider setting up a separate automobile finance business center? What will be the next key development direction?

Zhang Jinliang: Our Auto Finance Business Center adopts a divisional management model, implements independent accounting, independent assessment, and embedded risks. The purpose is to stimulate organizational vitality and promote the growth of auto finance business by giving the Auto Finance Business Center independent control over personnel, finance, risk, credit resources, etc.

Next, we will also strive to achieve full-chain, full-process, and full-online financial services for the automotive industry.

The full chain means that while serving automobile OEMs and automobile dealers, the services are extended to upstream automobile parts suppliers and downstream consumers, and to subsidiaries of OEMs, dealer holding parent companies, etc.

The full process refers to using the Everbright Group's full license advantage and its own comprehensive financial service capabilities to provide full-process financial services to all participants in the automotive industry chain. For example, for OEMs, it includes project loans, bond issuance, asset securitization, comprehensive credit, network construction financing, corporate financial management and other services; for dealers, it includes store construction financing, inventory financing, payroll, credit cards and other services.

Fully online means leveraging its own technological advantages to realize full online application, approval, loan issuance, post-loan monitoring and other aspects of auto finance business, so as to improve efficiency, standardize processes and prevent and control risks.

"21st Century": What specific methods are used to expand financial services to the upstream and downstream of the automotive industry chain?

Zhang Jinliang: Our Auto Finance Business Center has established a special product management department, which aims to streamline the auto finance business processes and optimize processes and develop new products based on the specific business needs of each participant in the auto industry chain.

In terms of extending to upstream spare parts suppliers in the industrial chain, through cooperation with China Enterprise Cloud Chain, we jointly developed the "Cloud Chain Factoring" business of "Sunshine E-Chain". The OEMs pay upstream suppliers by issuing "Cloud Letter". After receiving the Cloud Letter, the upstream suppliers can hold it until maturity and wait for payment, continue to transfer it to their upstream suppliers, or transfer the Cloud Letter they hold to China Everbright Bank for factoring financing.

In terms of extending to downstream end customers in the industrial chain, we will provide individual consumers with convenient and rich financing services through multiple channels and multiple products. At the same time, we will actively use financial technology to provide individual consumers with fully online financial solutions based on big data, thereby meeting personal improvement car purchase needs while helping automobile OEMs and dealers to sell better.

Strategic Choices in the Opening-up of the Automotive Industry

"21st Century": Why choose national and independent brand manufacturers as the focus of auto financial services?

Zhang Jinliang: In 2017, my country's self-owned brand car sales reached 10.847 million units, accounting for 43.9% of the total car sales, an increase of 0.7 percentage points over the same period last year. In this process, our bank has been supporting the development of my country's national independent auto brands. As of the end of April 2018, the proportion of China Everbright Bank's financing for national and independent brands accounted for nearly 70% of the total automobile financing. The top auto OEMs in terms of financing amount served by the "All-round Pass" business are all national brands.

In the future, with the implementation of the "double points" policy and the country's strong support for pure electric new energy vehicles, domestic brands are expected to overtake others in this field. China Everbright Bank will continue to provide comprehensive and high-quality financial services for the development of domestic brands.

Recently, the automobile industry has further opened up to the outside world. The country has successively introduced policies to relax restrictions on foreign investment in the automobile industry and reduce tariffs on auto parts and complete vehicles. World-renowned automobile manufacturers have successively expressed their intention to further reduce car prices and speed up the pace of building factories in China. On the basis of providing good financial services for our own brands, we will further strengthen services and innovations for joint ventures and imported brands to support the development of the real economy.

Financial technology improves service efficiency

"21st Century": What financial technology methods have been used in the field of automobile finance and what are the effects?

Zhang Jinliang: At present, financial technology represented by the Internet, big data, cloud computing, artificial intelligence and blockchain has gradually become a new driving force for financial development. In the automotive finance business, we have gradually established and improved the online supply chain finance platform and realized online financing. The layout will mainly be in the following three aspects:

First, further strengthen the connection between the system and the systems of automobile OEMs and regulatory companies to achieve information sharing, improve the work efficiency of all parties, and reduce the probability of risks caused by information asymmetry.

Second, actively use new scientific and technological means to assist in risk prevention and control of auto finance business. For example, in terms of vehicle supervision, use the rapid information collection function based on barcode, RFID, and OCR recognition technology; set up electronic fences, and use OBD equipment to monitor vehicle movement information.

Third, actively cooperate with third-party institutions, and use their unique information sources, massive big data resources, and advanced risk control models to do a good job in risk warning and monitoring. For example, use third parties to study the behavior of relevant participants in the automotive industry, comprehensively judge their default probability, and thus provide early warning.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.