Online financing will not take over: ex-exec

Ma Weihua, former president of China Merchants Bank, said Saturday that Internet financing will not take over from commercial banks.

Ma made the remarks at the 7th Annual China Bankers Forum 2013 hosted in Beijing by the China Europe International Business School (CEIBS).

Traditional commercial banks will face more competition from Internet-based lenders, Ma said, but traditional banks still have their own advantages.

Ma noted that the main aspect of Internet banking is interconnection and networking, and Internet banking can be complementary with traditional banks.

Ma's comments were echoed by Wu Xiaoling, director of the CEIBS Lujiazui Institute of International Finance. Wu said that Internet enterprises that are engaged with the banking business would not have a "disruptive" impact on traditional banks.

At the moment, the main areas of Internet financing are third-party payment services, micro loans provided by firms such as Alibaba, online sales of fund products, and peer-to-peer lending.

These areas generally apply to small businesses, while traditional banks have more expertise in dealing with bigger firms, Ma noted.

Also, some complicated financial products need to be discussed face-to-face, so this will not be replaced by Internet banking.

Online finance has been expanding fast recently, and Wang Guizhi, vice president of China Guangfa Bank, said at the forum that the transparency and convenience of these Internet-based services pose a challenge for traditional banks.

In June this year, Alipay, a subsidiary of e-commerce giant Alibaba Group, teamed up with Tianhong Asset Management Company to launch a new investment fund called Yu'ebao. Within two months, investment in Yu'ebao exceeded 20 billion ($3.27 billion) yuan.

The Securities Daily reported on September 9 that there are 32 fund companies preparing to launch services on taobao.com.