10 Internet Finance Trends to Watch in 2015

1. Huge Growth Potential under“New Normal”

China’s economic “new normal” and ongoing financial reform will undoubtedly entail new economic structures， new development patterns， and new financial innovations， as well as new business models， leaving a huge space for the Internet financing growth.

The development of the Internet finance begins with the inclusive finance that provides financing services to all clients， not just the relatively well-off. The inclusive finance reaches out to low-income grass-roots， as well as small and micro businesses， offering them affordable financial services tailored to their needs.

On Nov. 12， 2013， the “Inclusive Finance Strategy” was put forward at the Third Plenary Session of the 18th CPC National Congress， giving a clear-cut route for the development of the inclusive finance on the Internet.

In fact， it is no exaggeration to say that the current economic situation in China offers a historic opportunity for the explosive growth of the Internet financing sector.

Particularly， the traditional economic structure adjustment， together with the industrial transformation and upgrading， brings new opportunities for the Internet finance sector in the country， while the rapid growth in the mobile Internet and O2O e-commerce creates new markets for online payment.

Besides， the ever-expanding public wealth and increasinglydiversified financial demands will give new opportunities for the Internet banking. Online P2P lenders will also move to a new healthy growth path， driven by policies that aim at stimulating small and micro business financing and promoting rural financial services.

In addition， a new wave of mass innovation and entrepreneurship will be followed by a spree of crowd-funding， which is expected to set off a revolution in the business models.

2. Move Deeper into MSIS

In 2014， the concept of China’s Internet finance trending toward mobile informationization， social communications networkization， industrialization and socialization（MSIS） was first put forward by the China Internet Finance Conference （CIFC）.

According to data from the Ministry of Industry and Information Technology（MIIT）， China’s mobile Internet users totaled 874 million as of October 2014. It is foreseeable that with the rapid growth of mobile payment， mobile banking， mobile wealth management and mobile investment in 2015， an era of Internet finance will be in full swing.

According to data from the People’s Bank of China， in the first three quarters of 2014， the number of mobile payments processed by China’s banking institutions added up to 1.28 billion， up 157.81% from the same period of 2013， with a total worth of 6.16 trillion yuan， up 112.70% on a yearly basis.

In 2015， the sector will move forward along the abovementioned trend， which will become an important strategy for Internet financing providers seeking to gain the upper hand.

3. Crowd-funding Sprees Inspire Mass Innovation and Entrepreneurial Activities

Crowd-funding will be one of the red-hot topics in Internet finance this year as an entrepreneurial model and a catalyst to a business revolution for the transformation and upgrading of traditional industries.

The crowd-funding sector is expected to embrace an explosive growth this year with a huge increase in the number of crowd-funding platforms and the overall financing scale.

At an executive meeting of the State Council held on November 19， 2014， Prime Minister Li Keqiang brought forward the proposal that China should establish a quick mechanism for the micro refinancing in the capital market and carry out equity crowd-funding pilots.

“The Internet is a new tool for mass innovation and entrepreneurial activities”， the prime minister said when meeting with representatives at home and abroad at the first World In-ternet Conference a day later.

On December 18， the Securities Association of China（SAC） released an exposure draft for administrative measures for the management of private equity crowd-funding， which confirms the legitimacy of private equity crowd-funding.

In 2015， the crowd-funding sprees will inspire mass innovation and entrepreneurial activities. In return， the Internet giants， financial securities， traditional enterprises and start-ups itching to pile into the crowd-funding sector will drive new innovations in crowd-funding forms.

In a word， a business revolution is on its way.

4. New Pattern for P2P Online Lending

The development of P2P lending platforms will be standardized this year. In 2014， more than 1600 P2P platforms were established， doubling the number a year earlier. However， over 270 of those newly-established platforms were found to be problematic last year.

In December alone， the number of P2P lending platforms found to be problematic added up to 92， according to data from .

In 2015， China’s P2P lending sector will gradually shift from a chaotic growth mode to a standardized mode， phasing out a slew of unqualified platforms through a more competitive environment and a more strict set of regulations.

From the background perspective， more and more P2P lending platforms will be launched by banks， securities companies， state-backed companies and listed companies this year， with the registered capital up to tens or even hundreds of million yuan， dwarfing those platforms set up by “grassroots”start-ups.

Inevitably， with a swarm of financial institutions and traditional corporate giants tapping into P2P lending platforms， the threshold to set up a platform will be increased. Despite a higher threshold， P2P lending platforms will continue to mushroom this year.

Besides， not only P2P platforms， a variety of types of platforms will emerge in 2015， such as O2O， P2N， N2P， and N2N， expanding the lineup of online lending platforms.

5. Infinite New Opportunities Abound in “Internet Finance plus”

In July， 2014， the CIFC launched the plan of “Internet Finance plus”， proposing to integrate the Internet finance with industries， technologies， talents， industrial parks， enterprises， media and think tanks in a bid to establish an “Internet Finance plus” ecological innovation model.

Particularly， the mode for “Internet Finance plus Industries” is changing the business mode of traditional industries， as it promotes dynamic changes in industry boundaries and creates new businesses through the interpenetration among different industries or different sub-industries in the same industry， which is an interaction process between the technological prog- ress and the economic development.

In 2015， the “Internet Finance plus” will establish more new modes in the integration with more fields and industries， creating infinite new opportunities for industry development.

6. Internet Finance Enters into 3.0 Era

If we call the first boom of Internet finance triggered by the launch of Yu’ebao and other similar funds in 2013 as the Internet finance 1.0 era， and define the sprees of P2P lending platform and crowd-funding in 2014 as the Internet finance 2.0 era， a deeper integration between industries and Internet finance in 2015will be the Internet finance 3.0 era.

According to a forecast from the CIFC， a slew of industries in China， including science and technology， agriculture， automobile， new energy， environmental protection， real estate， culture， film and television industry， and modern services will march toward Internet financialization.

The mode of Internet financialization will be a new engine for the traditional industries to innovate in their business models， and upgrade and transform their industrial structures.

Equity crowd-funding， supply chain finance and financing lease will offer more innovation modes for industries’ Internet financialization.

7. Self-finance and Microfinance Get off to a Good Start

2015 will see the self-finance come into being in China. The self-finance will be featured with an innovative mode of“self-media plus Internet finance”， which incorporates the social feature of self-media into fragmented Internet finance.

In addition， the microfinance sector will develop an ecological system. Microfinance platforms， which deliver financing services to small- and micro-sized enterprises， entrepreneurs and ordinary people， will step on the gas this year. As a consequence， the innovative service modes of microfinance will be increasingly diversified.

The development of self-finance and microfinance heralds that the Internet finance will soon enter into the“microfinance era” and “self-finance era”.

8. Talent Shortage and Industrial Park Building Spree

A huge talent shortage always comes in the wake of an explosive growth in the number of companies， which is one of main bottlenecks for further development faced by ambitious companies.

Currently， Internet finance companies face such a dilemma. Moreover， with a foreseeable influx of traditional enterprises and financial institutions， the Internet finance will face an even worse shortage of professional talents in 2015， entailing a fierce battle among companies for talents， especially multi-skilled talents with extensive experience in the fields of Internet， finance and new media marketing.

Besides， the country will see a building spree of industrial parks in the Internet finance sector this year， as the Internet finance has become a new engine for the local economic growth and the transformation and upgrading of traditional industries.

By far， China has established three Internet finance parks in Beijing and five in Shanghai. In 2015， a new wave of Internet finance park building will arise in cities that put the focus on the development of the Internet finance.

9. Internet Finance Regulation Looms

On December 10， 2014， the Insurance Regulatory Commission （IRC） issued an exposure draft for interim measures for the regulation of Internet insurance， the first regulatory document aiming at Internet finance in the country.

A few days later， another exposure draft for administrative measures for the management of private equity crowdfunding was released by the SAC.

It is expected that in the first half of 2015， the PBOC， China’s central bank， will issue the opinions on promoting the healthy development of Internet finance， while the China Banking Regulatory Commission （CBRC） will publish regulatory approaches for the P2P lending sector.

With the Internet finance regulation looming， the concept that the healthy development of Internet finance not only needs innovations but also needs regulations and selfdisciplines has been widely accepted.

10. Investors Vie for a Slice of Internet Finance Pie

In 2015， investors will in hot pursuit of the Internet finance， especially the crowd-funding.

During the period from 2013 to October 21， 2014， a total of 191 investments injected into the Internet finance， with those in wealth management and financial information service accounting for more than 60.

In 2014， the number of P2P lending companies set up by investment banks， listed companies and state-backed companies was 12， 17 and 17 respectively. In 2015， more financial institutions， listed companies and traditional giants will flood into the sector， vying for Internet finance companies.