Tencent and Alibaba are refusing to cooperate with government-backed credit scoring company Baihang’s request for customer loans data, Financial Times reported on Thursday. The tech giants had been asked to grant access to their customers’ credit data and personal information.
Why it matters: Baihang, the only personal credit score provider in China, has been struggling to get credit data from major tech companies, which are reluctant to relinquish control over valuable user data.
- The People’s Bank of China (PBOC) launched Baihang last year in a bid to create a unified national system for credit data. The PBOC made Chinese fintech giants, including Tencent and Ant Financial, the shareholders of Baihang, expecting a smooth handover of consumer data.
- Tencent, the operator of Chinese messaging and payment platform WeChat, and Ant Financial, the company behind mobile payment app Alipay, hold troves of customer data—perhaps more than any other companies in China.
Details: Baihang was hoping to get personal information and credit data such as names, ID and phone numbers, and credit histories from Tencent and Alibaba, an unnamed employee told the Financial Times, adding that only three of the eight shareholding companies have agreed to share their data with Baihang.
- A Tencent employee familiar with negotiations between Baihang and its member companies confirmed that the tech giants were not sharing loan data. “If it had been the [PBOC] itself asking for data, rather than this arm’s-length lower-level body, then perhaps they would have given it,” the employee said.
Context: The central bank launched Baihang in March last year. The system was set up to collect information and pool data from online financial services and lending platforms outside the traditional system.
- Baihang was established in conjunction with eight other Chinese the companies including Ant Financial’s Sesame Credit, Tencent’s Tencent Credit, as well as ride-hailing firm Didi Chuxing and online dating service Baihe.com. Private companies have since been barred from providing credit information services on their own.
- Baihang has been trying to expand the coverage of the system. Earlier this month, the central bank formally included the troubled online peer-to-peer (P2P) lending sector to its credit reference system as the clampdown on illegal financial services continues.