Ant Financial Services Group is rolling out its new credit-scoring service Sesame Credit, which combines “big data” technology and customer behavior analytics to help make credit more available to millions of Chinese consumers. While the name Ant Financial Services Group may not immediately ring bells for American readers, the businesses that they operate are quite well known: Alipay, Alipay Wallet, Yu’e Bao, Zhao Cai Bao and Ant Credit
Sesame Credit is a first-of-its-kind scoring system in China. Online and offline data are used to build credit scores for consumers and small business owners, which lenders, merchants and other companies can use to determine customers’ creditworthiness.
“Sesame Credit is focused on those who may have little credit history at traditional credit agencies,” said Yu Wujie, Chief Data Scientist of Sesame Credit. “They may have never obtained bank loans or applied for credit cards. However, they might be active Internet users who shop online a lot, e-pay their utility bills on time, have a stable residential status and have been using their mobile phone numbers for a long time. We will take these and other factors into consideration when assessing consumers’ creditworthiness.”
The goal, according to Eric Jing, Ant Financial's CEO, to change the way everyday commerce can and does flow for many Chinese consumers.
“By leveraging the big data we have and the state-of-art technology we deploy, we believe the debut of Sesame Credit will not only enable credit providers to make holistic and accurate decisions, but will also empower merchants to provide more credit-related services,” said Jing. “This will make their everyday life easier and help spur the development of a healthy economic and social environment.”
Ant Financial’s connection to e-commerce giant Alibaba Group powers Ant's scoring system, which is currently in the beta-testing. Because payment histories are available from Alipay for the 300 million real-name registered users and 37 million small businesses that buy and sell on Alibaba, Ant has a vast online ecosystem to tap into and data mine for the information it needs to build better credit scores. The service is being tested in a handful of hotels, which are allowing travelers with superior sesame credit ratings to book and stay without paying in advance. A Chinese online dating site that allows suitors to check their potential dates’ credit ratings to make sure they are not meeting someone who is dishonest or untrustworthy is also making use of the beat of the service.
To protect user privacy, individual consent must be granted before data is collected. Moreover, what information is gathered is protected by encryption.
Scores with the new system will range from 350 to 950 points, and users will be able to access their scores through the Alipay mWallet app or through merchant websites that use Sesame. Sesame Credit is being launched as an independent brand. The company has been registered as Sesame Credit Management Co., Ltd, operating under Ant Financial.