The 2025 Consumer Finance Ecosystem Conference, themed “Finance Boosts Consumption, Embarking on a New Journey,” was held in Chongqing. Representatives from licensed financial institutions, internet platforms, and technology service providers gathered to discuss the transformation and upgrading of the consumer finance industry in the new era. As a representative enterprise rooted in Chongqing for a decade, Minsheng Consumer Finance shared its practices and insights driven by technology, emphasizing its commitment to aligning with national policies, empowering its core business through technology, and optimizing financial product offerings to meet the growing and diversified demands of consumers.
Evolving Landscape of China’s Consumer Finance Market
China’s consumer finance market is undergoing profound changes. On one hand, regulatory policies are becoming increasingly stringent, imposing higher requirements on capital adequacy ratios, asset quality, and information disclosure. On the other hand, financial technologies such as artificial intelligence, big data, and cloud computing are rapidly developing, reshaping customer acquisition, risk control, and operational processes. Meanwhile, market participants are becoming more diverse, and the competitive landscape continues to evolve.
The Evolution of China’s Consumer Finance Industry
China’s modern consumer finance system has developed over 40 years. In 1985, Bank of China’s Zhuhai branch issued the country’s first credit card, marking the beginning of an industry that has since evolved into a regulated market requiring licensed operations. From 1985 to 2009, the industry was in its “budding stage,” dominated by large state-owned commercial banks and a few auto finance companies, with a focus on credit card services.
Credit cards catered to the small-scale consumption needs of urban residents, but due to the underdeveloped social credit system at the time, banks relied on traditional risk control methods, resulting in lengthy approval processes and limited coverage. The emergence of P2P platforms like “Paipaidai” in 2007 marked the beginning of internet finance, laying the groundwork for future developments.
From 2009 to 2013, the industry entered a “pilot phase.” In 2010, the China Banking Regulatory Commission approved the establishment of the first four consumer finance companies, including Bank of Beijing Consumer Finance, Bank of China Consumer Finance, Jincheng Consumer Finance, and Home Credit Consumer Finance. These institutions primarily operated offline, marking the beginning of consumer finance companies as an independent business model. During this period, P2P platforms also experienced rapid growth, introducing new possibilities for the consumer finance sector.
While business models began to diversify, the overall scale of the industry remained relatively small. From 2014 to 2017, the industry entered a “growth phase,” characterized by explosive expansion. The second batch of seven consumer finance companies was approved in 2014, followed by over a dozen more.
By May 2017, the number of licensed consumer finance companies had reached 24, with bank-backed institutions dominating the market. Policy-wise, the pilot program expanded from 16 cities to nationwide coverage. During this period, internet-based consumer credit products emerged, leveraging e-commerce platforms’ vast user bases and data advantages to offer online applications, fast approvals, and convenient repayment options, significantly improving user experience and rapidly capturing market share.
Traditional banks also intensified their efforts, launching various online consumer credit products. P2P platforms experienced rapid growth, but risks such as excessive marketing and aggressive debt collection practices began to surface. Since 2017, the industry has entered a “regulation phase.”
In response to issues exposed during rapid expansion and frequent risk incidents in the P2P sector, regulators have strengthened oversight. A series of policies have been introduced, imposing stricter requirements on business qualifications, interest rate caps, debt collection practices, and data security.
Under tighter regulations, both new financial platforms and traditional institutions have had to reassess their market strategies and risk control capabilities. Compliance has become the baseline for survival, while innovation must operate within a risk-controlled framework. Today, the number of licensed consumer finance companies has stabilized at 31. The industry has shifted from rapid, unrefined growth to refined operations.
The application of emerging technologies such as AI, big data, and blockchain has become crucial for enhancing risk control, optimizing service experiences, and securing competitive advantages, driving the industry toward a more mature and technology-driven future.
Reshaping Industry Competition Rules
In the restructuring of the consumer finance ecosystem, regulatory policies and financial technology are two key factors reshaping the industry’s competitive landscape and development trajectory. From a regulatory perspective, authorities have increasingly focused on standardizing and guiding the industry.
Policies such as interest rate caps have curbed high-interest lending, while capital adequacy requirements have encouraged more prudent risk management. Enhanced disclosure norms have improved transparency and protected consumer rights. These measures have fostered a fairer competitive environment, where institutions compete on service efficiency, risk control, and product innovation. From a technological standpoint, financial technology is revolutionizing the industry.
Big data enables institutions to better understand customers through multi-dimensional analysis of consumption behavior, credit history, and social connections. AI automates approval processes and post-loan management, improving efficiency and risk control. Cloud computing supports the processing of vast amounts of data, optimizing business operations. These advancements allow institutions to acquire customers more efficiently, assess risks more accurately, and provide services more conveniently. However, challenges such as data security and privacy protection have also emerged.
Survival of the Fittest and Capability Reinvention
As regulatory policies tighten and financial technology advances, the competitive landscape is undergoing significant changes, leading to a survival-of-the-fittest scenario and higher demands on market participants’ capabilities. Sun Lei, Deputy General Manager of Minsheng Consumer Finance, noted that the industry is currently facing a challenging period marked by shrinking growth, intensified competition, and rising risks.
This difficulty, however, is relative, as the broader financial sector is also experiencing growing pains due to economic slowdowns.
Key factors include the bottleneck effect of rapid industry expansion, the spillover effect of economic deceleration, the competitive pressure from large banks shifting to retail, and the cumulative impact of regulatory policies. In response to these changes, market participants are pursuing differentiated transformation paths, with technological innovation becoming a critical driver of industry restructuring. Traditional institutions like Zhaolian Consumer Finance are scaling back asset sizes while increasing tech investments to lead in AI applications.
Minsheng Consumer Finance has launched its “Tianjing” retail finance model, covering eight key areas and serving over 200 million users. Ant Consumer Finance leverages Alipay’s ecosystem, while Xiaomi Consumer Finance focuses on the 3C sector through offline stores and supply chain integration. Haier Consumer Finance has invested nearly 2 billion yuan in building a financial technology system and expanding into home appliances, education, and medical aesthetics. It has partnered with 11,000 merchants and served over 3 million installment users.
During this year’s “618” shopping festival, Haier Consumer Finance will launch promotional activities in cities like Shenzhen and Tongren. However, many bank-backed consumer finance companies are lagging in strategic transformation, lacking innovation and competitiveness.
As the industry moves toward technology-driven and specialized development, these institutions must break free from traditional paths and accelerate their transformation to remain competitive. Looking ahead, the industry will see intensified “Matthew Effect,” diverging tech investments, and deeper scenario-based services. Institutions must build differentiated advantages within a compliant framework to navigate the new cycle successfully.
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