On December 20^th, 2015, the first Digital Finance development index in China---Peking University Internet Finance Development Index was officially released. On behalf of the research group, Yiping Huang, director of Institute of Digital Finance of Peking University (IDF), released the Peking index, which is mainly about what is Digital Finance Development Index. There is a lack of sufficient data to depict the general picture of Digital Finance as a new business model.

 

Together with Shanghai Finance Institute (SFI), the think tank in digital finance, and Ant Financial Services Group, the authoritative digital finance corporation in China, the Institute of Digital Finance of Peking University (IDF) composes PKU Internet Finance Development Index to promptly and objectively record and evaluate China’s digital finance development track. PKU Internet Finance Development Index is not only based on vast database provided by Ant Financial Services Group and other representative digital finance corporations, but also combines the academic and professional advantages of PKU and SFI. By composing the general national index assorted by attribute, service and region, it is ambitious to become the most authoritative and symbolic academic product in describing the developing trend of digital finance to escort along the national strategy “internet plus”.

 

As a quantitative tool reflecting complicated overall variations, this index is considered meaningful in the following respects:

 

Firstly, it records the development track of Digital Finance and helps workers within this industry and investors to know about its overall development and hot topics;

Secondly, it renders references for relevant government supervision and policy making in supporting and regulating the Digital Finance industry;

Thirdly, it provides local governments with an overview of local development, as well as a clear instruction in digital finance through the regional index.

 

What does the index include?

 

The Digital Finance development index designed this project only includes a narrowed definition of Digital Finance, that is, the financial services developed by internet enterprises and based on internet technology.

The data needed comes from Ant Financial Services, Zhongan insurance, Memeda Financial Services, Qufenqi, People’s Bank of China, Zero-One Finance and other representative Digital Finance enterprises or third party institutes. The project group divided digital finance services into six parts according to their attributes, including internet payment, internet currency fund, internet credit, internet insurance, internet investment and wealth management, and internet credit.

 

According to the breadth and width indicator of each service, the research group composed one transaction development index and drafted the overall index reflecting the overall development of digital finance. Meanwhile, based on the relative ratio of different regions and attributes to the national development, the research group computed the region and attribute indexes. What are the conclusions? Digital finance develops rapidly while undergoing abrupt seasonal fluctuations: slow during spring festival while reaching an acceleration peak during “Double Eleven” online shopping festival. Up to September 2015, internet payment and internet currency fund development index were slightly below internet investment and internet insurance, for the previous two developed in a more mature manner. Males and females do not differ much in terms of participating digital finance, but different age groups distinctively. Digital finance mostly relies on generation 80s and 90s, but it has a tendency to spread towards the bipolar of the spectrum. Digital finance development index has a high relevance with macro economy indicators (i.e. purchasing manager index in manufacturing industry) and traditional finance measurements (i.e. the scale of social financing). It will not develop independently from real economy, nor will it step an entirely different path from the traditional finance, but rather, it will be a beneficial complementation. Before the stock market disaster in June 2015, the tendency of digital finance development index and A-shares circulation market value performed a strong consistency at the end of month once compared, However, after the disaster, A-shares market value shrinked largely while the digital finance development index, though its acceleration slightly slowing down, still indicated an upward trend. Li Qiang, president of Institute of Digital Finance of Peking University, said in his speech at the opening ceremony, that Institute of Digital Finance of Peking University is cofounded by Institute of Social Science Survey, PKU, Shanghai Finance Institute (SFI) and Ant Financial Services Group.

 

Institute of Social Science Survey, PKU is an interdisciplinary research platform on social problems and current affairs in china. It has international advanced research method, rich experience and several influential nation-wide tracking research projects; CF40 and its subordinate Shanghai Finance Institute (SFI) is the leading finance think tank, rich in fruitful research result and industry resources; Ant Financial Services Group has vast data accumulation, advanced cloud computing and big data techniques, making it influential within the industry.

 

On January 28th, 2015, the three institutes mentioned above held a signing ceremony on establishing Institute of Digital Finance of Peking University (IDF). After some time of preparation, the institute started its research. On April 13^th, after the inspection of Peking University leaders and acquiring the approval of Peking University President’s Office, the Institute of Digital Finance of Peking University (IDF) was officially launched. The Institute implements a Director Responsibility System under the leadership of the council, occupied by representatives from the three founding parties. As an open research platform, the council will absorb other digital finance institutions in the future.