(Yicai Global) Sept. 9 -- Employees of two Chinese big data risk management firms have been asked to assist in police investigations as the country's regulations on internet-based financing extend to big data, Yicai Global has learned from an industry insider.
A senior executive at Moxie Data was taken into custody on Sept. 6 for questioning. The Hangzhou-based firm ceased business that day and its website could not be accessed soon afterwards. The problem is likely to lie in the company's sources and use of data, the insider said.
Regulations on data privacy protection are intensifying. Many startups lack in-depth scenarios for generating data, so their information comes from external sources. Dangers may lie in their compliance for data acquisition and in their usage of this data.
Huang Xiangqian, chief executive of Shanghai Xinyan Artificial Intelligence Technology, was also asked by police to assist in an investigation. An online loan platform that the firm had worked with was found to have used strong-arm tactics to collect a debt. The fintech startup said its business has not been affected.
Big data is able to manage risk at financial institutions by using a vast amount of internal and external information to provide a greater range of scenarios. It allows financial institutions to identify potential risks quicker and with more precision as well as to react faster.
Moxie Data provides companies and institutions with risk management services such as risk analysis, anti-fraud measures, multi-dimensional user portraits, credit ratings and post-loan warnings. The company has over 2,000 customers, including banks, online lending platforms and consumer finance companies, according to its website.
Fintech startup Xinyan Technology uses artificial intelligence, biometric identification and machine-learning technology to help financial institutions better manage business risks, according to platform Shanghai Finance. The firm uses big data to monitor the credit status of individuals whose information might not be included in the central bank database and can raise an early warning to lenders if necessary.
Set up in 2016, Xinyan Technology the provides credit management to financial firms including pre-loan access, real-time handling of anti-fraud measures, real-time loan monitoring, tracking of post-loan assets and users' repayment ability. The firm has partnered with over 2,500 companies, according to its website.