The rise of online consumer loans in China has spawned a thriving black market in stolen user data, according to the Financial Times. Virtually non-existent in the country five years ago, consumer lending through websites and mobile apps has expanded rapidly over the past 18 months amid a proliferation of fintech start-ups that use big data to assess credit risk. Two such companies, Qudian and Ppdai, have completed initial public offerings in New York since October.
While regulators appear to be focused mainly on default risk from unqualified borrowers and abusive collection practices, experts are also raising concerns over data privacy. “Consumers know that loan platforms are collecting their data but they don’t know who is selling it,” said Zhang Yi, chief executive of iiMedia Research, a consultancy. “For the most part, these platforms aren’t selling data as their main business or they wouldn’t be able to survive. But employees who manage the data are the main source of data leaks.”