MYBank, backed by Alibaba, is an all-digital 24/7 bank, with no physical branches, focusing at those with limited access to financial services in China

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Country: ChinaMYbank
Year: 2015

  • Opportunity for an insurance company to tap into SMEs market
  • Based on the customer historical financial data: An insurance company could proceed with direct repayments to trustworthy customers who file their claims

Concept

  • MYBank is aimed at individuals who expect more out of the existing banking system: SMEs who struggle to fit into a financial bracket for loans and services, and those in rural areas who have issues accessing branches and banks in person
  • The bank will target financial products for deposits below 200,000 yuan and loans of less than 5 million yuan ($805,000)
  • MYBank uses cloud computing rather than internal IT systems, while it has kept its staff to 300 employees thanks to being digital

Consumer Benefits

  • Services for SMEs: MYbank will extend loans of under 5 million yuan ($805,000) to private individuals and small firms, a market traditionally under-served by state-run lenders
  • Lower fees for customers: MYbank will be able to circumvent the typical expenses required to market to and onboard new customers, as they will have access to the existing Alibaba network of SMEs, thus resulting in lower fees for the end-customers

How it works

  • Without brick-and-mortar costs low, only 300 employees, and access to Alibaba’s network, MYBank can access to a large amount of online data to determine the borrowers’ creditworthiness and lending risks
  • MYBank functions like a traditional bank, taking deposits and making loans but its services are tied to customers’ Alibaba transactions, and it will reach them through an app. There is no collateral from debtors but it looks at the financial data that customers have accumulated on Alipay, Taobao and Tmall

Illustration

  • Alibaba launches online-only private bank