Launched in 2011, Rong360 operates an online financial product search platform providing loan recommendations for small and medium sized enterprises and individuals. Currently the service has attracted several hundred thousand users and received loan applications which added up to tens billions RMB. In the very first month, Rong360 already won the capital backup from KPCB, Lightspeed and Zero2IPOVenture with up to $10 million A series funding.
Behind the scenes there is the founder Ye Daqing, a finance veteran who once worked for PayPal and AMEX. Recently Ye was interviewed by local media and revealed the story of his financial search platform.
New Banking Channel
Although for now over 50% of the users access information of loan products through consulting banks in person, Ye foresaw the future of online product search as the new channel. Actually many listed banks revealed that the business volumes online have surpassed those over counters, having risen to up to 60%-70%.
Not long ago, Rong360 surveyed Chinese netizens on their online searching behaviors. The result showed that about 20% of the netizens have already gotten used to comparing prices through online searches. For Ye, he believed in this growing habit and tried to see that happen in the financial market.
What’s After the Search
“The application procedure which used to be done offline forever needs to get online now.” Rong360 allows users to actually apply for the financial product after their search. Entering the amount of loan, period, and purpose, the platform will automatically do the match and output a list of banks or credit agencies corresponding to the users’ requests. On the list, users can find the institution names, products, interests rate, gross interests, monthly payment, and the available periods, etc. All these information helps the users to compare and do the final decision.
Finishing the online application, users will be contacted via phone by credit managers who are in charge to confirm all the information. The best part for the user is the easy approach to compare various products offered by different banks before they actually land on the product they want. For banks on the other side, Rong360 helps them connect to clients more efficiently, thus the current business model of the company is to charge the financial institutions not the users. The charging model of Rong360 accordingly falls into three types: 1) charge according to the number of the application orders; 2) share profits with banks/ institutions; 3) advertising. Ye added that the ads model only covered less than 5% of the total revenues and that the company tended to not charge when working with some major banks.