Lufax, China’s leading lending and wealth management platform, has hinted its working on integrating distributed ledger technology (DLT) into its operations to reduce cost and increase transparency, reported The South China Morning Post on November 2, 2018.
Lufax Joining the Blockchain Movement
Per sources close to the matter, Lufax has reportedly declared that it will be integrating blockchain technology into its operations and would replace its existing legacy peer-to-peer (P2P) lending platform with one powered by DLT. One of the strongest qualities of the technology is its feature, which makes data stored on it to become permanently tamper-proof.
The CEO of Lufax Greg Gibb, who was present at the Hong Kong FinTech Week event, reportedly made it clear that at a time when transparency has become a significant challenge for the P2Plending industry, coupled with severe regulatory crackdown on the sector, interested market participants can tap into blockchain technology to improve transparency and drastically cut down costs.
At a time when China’s lending platform options are kicking the bucket with each passing day, and 118 firms calling it quits earlier in July 2018 due to the Chinese government’s increased oversight, Gibb says he sees more of the 1,500 operators crashing in the short term.
“The problem for the P2P lending ecosystem, not just in China but globally, is that it is not transparent,” declared Gibb, adding:
“So if we could store all the contract agreements between borrowers and lenders on the distributed ledger, then these become unalterable.”
The official further noted that integrating DLT into the global P2P ecosystem will ensure all players in the industry, including regulators, custodians, and others will have access to unfalsified data regarding all loan contract terms at all times.
Lufax to Use Blockchain Technology for Documentation
In addition to utilizing DLT for secure data storage, Gibb has also revealed that the Ping An Insurance unit will also employ the groundbreaking technology in verifying the eligibility and documentation for accredited Chinese investors.
Gibb explained that the DLT-based solution would function like a digital passport containing all the required information to prove to financial institutions that the bearer is a qualified investor, eliminating the cumbersome need to revalidate all the client’s documents.