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Credit Ease Chen Huan: Blockchain Has Business Boundaries

Finance is often progressed with science and technology. “In the era of datanized and smart finance, P2P service empowered by technology make it possible for financial intermediation. The power of technology is limitless, such as the cryptocurrencies and smart contracts, they may be creating a new rule of service. ” Chen Huan, chief strategy officer at Credit Ease, shared his thoughts on the relationship between technology and finance and smart financial development at EmTech China last week.

Chen Huan, Chief Strategy Officer of Credit Ease

Blockchain change the logic of business and has its boundary
Chen Huan mentioned that the development of financial technology has gone through several stages. More than a decade ago, information streamline and IT were promoted by financial institutions. After the dawning of the Internet, the financial industry entered the age of network and users began to use Internet-based financial products like online banking, online securities, online insurance, etc. Along with various kinds of user data appears, companies begin to consider how to make better use of them. Now, finance has become more digital, it has entered an era of smart finance.

Chen Huan said that Credit Ease is in early exploration of blockchain applications. He was thinking about how to better integrate the blockchain into his business and how to make the blockchain a better tool for financial service.
Chen Huan believes blockchain is a technology that has many merits. However what blockchain actually changes is the business logic. One needs to understand the outcome before he adopts blockchain technology. So, blockchain business services also have its boundaries, as well as its strengths and weaknesses.
In term of practitioners, they need to be prepared for blockchain applications.

“Many people claim that blockchain could promote and change their service. But why it has to be blockchain? Is he ready to adopt blockchain technology? Blockchain is decentralized, which means giving up certain power. Are they ready for this?”

“When data is stored on internet and transparent, all stakeholders, partners have access to the data and capable of analyzing it. Do they really want to share data to this extent?”

As for what application scenario is best suited for blockchain, Chen Huan believes that blockchain may be a better solution in some business model that requires decentralization and be involved with complicated authentication of transaction data.

“Some insurance agencies, for example, may use the blockchain to process some claims. They may use blockchain to verify previous data or smart contract to process automatically so that efficiency is enhanced. As many cases are similar in insurance industry, blockchain may help processing claims more transparent and reduce verification flow. Blockchain will reduce the middleman cost.


Blockchain for big enterprises: pros and cons?

When asked about whether the blockchain is damaging or helpful to big companies like Credit Ease, Chen Huan believes that the decentralization feature of blockchain is hard to come by in the business world. Centralized nodes plays an important role in modern business. Sometimes it is precisely because of the centralized node that the enterprise has a lot of powers with great business value. However, if the decentralization is really achieved, the way how entities operates may change dramatically.

Therefore, it is hard to reach a simple conclusion whether blockchain is damaging or helpful to existing big enterprises.

” We feel that some business data have values and if we give up some of the key information accumulated previously. Do it make the data more open and transparent? We need to find new competitive advantages in the business, which may pose some challenges for us, but if we think of it as a future trend, we should think about it now.”

“On the other hand, the blockchain has given a huge impact to each individual and each individual can be monetized. In fact, in some financial occasions, such as the distribution of financial products, you may now be an institution. Distribution of the company’s organization is implemented. You may not be able to distribute it in a more individualized way in the future. Decentralization of information, decentralization, it may be possible to promote the development of your business, of course, these are some thoughts. “

Blockchain May have great impact in the next 5 to 10 years.
Chen Huan said that Credit Ease has started development of blockchain since 2014. But he also admitted that a proper entry point has not been identified.

We haven’t identified the entry point of blockchain. How is it different from what are doing now. Many of its features like decentralization may sound lovely but do we really need it in our business? If such spot is confirmed, then the technology could be promoted. I always believe that the impact brought by technology, which is always been underestimated. If we put it to a longer time scale, it should be of great impact in the next 5 to 10 years.

Speaking of the ICO, he believes that ICO is out of control and lost in a group mania. But opportunity should be present under proper regulation framework.

“ICO allows everyone to issue their own token, which could be compared with the issuance of stocks. In the future it could be interesting, not necessarily subversive, way of business. In order to make it more popular, there should be some regulation framework. In the early age, issuance of stocks is a conduct of fund-raising, which could be addressed as illegal fund-raising behavior. Later proper securities appeared with stock excahnges. It takes time to build the infrastructure.”


Finally, Chen Huan introduced the blockchain exploration and layout of Credit Ease. At present, the research and exploration of blockchain mainly focus on the application level, such as applying some blockchain technology in the supply chain business and expanding its business capabilities and modules. In addition, Credit Ease also have a public welfare platform, in which lending record are stored permanently on blockchain. Credit Ease is always on the way to explore more potential with blockchain.

“We look at fintech as a spinning wheel flywheel, brings value to our customers through constant technical upgrade. Meanwhile we also drive the wheel so that greater value could be shared among clients. “

Chen Huan concluded.


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