Ant Finance, the arm of Alibaba Finance will launch a new internet bank service MYBank in June to accelerate Alibaba to be a full-fledged Chinese online financial network. The financial service scope of Alibaba group will comprise 6 parts including online payment method Alipay, mobile wallet - Alipay Wallet, Yu'e Bao, a money market fund with 570 billion yuan ($93 billion) under management; Zhao Cai Bao, a third-party financial services platform; micro-loan provider Ant Micro; and MYBank, a private bank in the coming month.
MYbank will be an Internet-based commercial bank providing online financial services for small- and micro-sized firms and individual consumers at e-commerce platforms with a sum of deposits no more than 200,000 yuan (32,520 U.S. dollars) and loans worth no more than 5 million yuan. The establishment of MYbank will benefit from years of operational experience of Aliloan, which has been providing financial services for small- and micro-sized companies on Alibaba's major platforms Taobao and Tmall.
Launched in 2014, Tencent's Webank laid the foundation for Alibaba’s entry. Webank allows users to apply for personal loans of up to RMB 200,000 without the need for collateral; applications are processed within 15 minutes. The service is designed for users that want a short-term loan with no specificed term or repayment penalty. The loans will have a daily interest rate of around 0.05%.
The growth of MYBank and Webank's expansion will largely depend on the Chinese Government's attitude. That shouldn't be a problem in the near-term though as right now they are incredibly supportive of the private banks as the government pushes away from state-owned banks to a much more competitive and responsive industry.