Study on risk of internet finance

Abstract

The modern information technology represented by the internet, especially the emergence of social network, search engine, mobile payment, cloud computing, network, big data and other information technology, will have a substantial impact on modern financial model [1]. Over the past 10 years, a similar disruptive eect has occurred in multiple industries: book, music, merchandise and retail [2]. The inherent development need of the internet industry and the financial sector, especially deep-seated need of financial reform, drive the rapid development of internet finance. Financial sector can expand the breadth and depth of the internet service functions, also help finance innovative products and services, expand with low-cost, make a useful supplement to the traditional financial system, and meet the growing financial needs of heterogeneous. In internet finance model framework, labor division and specialization of modern financial industry are bound to greatly weaken, and will be replaced by the internet and its related technologies; Financial market participants will be more civilianize, causing through the exchange in internet finance market not only enable investors to be benefit, also even ordinary consumers will be very profitable; Entrepreneurs, investors and the general public are all capable to take a wide range of financial transactions through the internet platform, and risk pricing, duration matching and other more complex financial transactions will be greatly simplified, easy to operate [3]. However, when the internet finance makes convenience to the masses daily lives, tremendous impetuses to national economic activity, also exacerbates the instability of financial markets. Internet finance has the same riskcategories of traditional finance sector, such as market risk, operational risk, the risk of asymmetric information, reputational risk, policy risk, but these risks due to incorporate the internet finance characteristics, are dierent in evoking reasons, performance forms, the degree of harm and other aspects. In addition, the internet finance has also brought new kinds of risk, such as technical risk, the unique legal and institutional risk, information security risk, etc.