Jack Ma’s Ant Group is in the midst of discussions with enterprises owned by China that would create a credit-scoring firm while making Ant’s data transparent to the country’s regulators, The Wall Street Journal reported on Wednesday (June 23), citing sources.
The new venture is anticipated to move forward before the end of this year and could mean that some of the financial and transaction data of Alipay’s 1 billion-plus users would be open to state review. Aside from offering payments, Alipay — an affiliate of Alibaba — also enables users to borrow money and invest.
It’s not known whether the possible joint venture would give Ant control of running the company, or if that would fall to the state-owned firms, sources told the news outlet.
A Shanghai-based financial conglomerate is one of the entities that could form the new entity with Ant Group. Regulators are looking to have future shareholders participate in the proposed company regarding operations, the sources told the WSJ.
China doesn’t currently have a national credit-scoring system that is similar to FICO in the U.S., which uses multiple resources to ascertain the creditworthiness of an individual.
China’s most recent regulations being proposed for technology companies could make most data-related activities subjected to government supervision. The move could effectively mean that all data gleaned in the country could be considered a national asset.
Earlier this month, Ant Group was green-lighted to launch a consumer finance company called Chongqing Ant Consumer Finance following Chinese mandates to restructure. Chongqing Ant can extend consumer finance products, including loans, insurance products and advisory services.
Any is still eyeing a public offering, which could happen before the year is over. The valuation, however, is anticipated to be reduced by 60 percent, amounting to an estimated $120 billion. When the company’s initial public offering was halted earlier this year, the company had a valuation of approximately $320 billion.