China’s first Internet banking service Webank to use facial recognition technology
Earlier this week, Webank launched the “test run” of its Internet banking service, which will use facial recognition technology as a method of authorizing its clients’ identification, according to a report by Shanghai Daily.
As China’s first Internet-based bank, Webank recently completed a pilot program to nurture private lenders in the state-dominated banking sector.
The “test run” only allows Webank to open accounts for shareholders and employees, with the official launch set for the end of the first quarter.
According to existing Chinese regulations, bank accounts may only be opened using traditional identification system, which means that Webank will need to approval from regulators if it wants to use face recognition technology.
Fortunately for Webank, there are already promising signs with the central bank soliciting opinions on a draft rule on opening bank accounts remotely.
The draft ruling states that the accounts would be limited to wealth management products only, and would not permit cash settlement, payment and reception.
Webank said that it will issue loans based on credit rating scores from social data collected by Tencent, which owns a 30% majority stake in Webank.
Last year, the central bank allowed eight organizations, including Tencent and Alibaba, to create their own credit-rating agencies. This is a far cry from the previous system used by traditional lenders, which depend largely on the central bank’s credit system and their own investigative efforts.
However, many people in the banking industry are unsure whether Tencent’s social information can accurately reflect the financial integrity of Webank clients.
Webank said its credit profile will take into account the various online activities of clients, including log-on time on Tencent’s messaging services, virtual assets, gaming, online purchases and transactions.