With the recent granting of approval for the opening of the Zhejiang E-Business Bank (MYbank), a total of five private banks have now been approved in China. So, as the first batch of private banks in China find their way, what is new about these banks in terms of products, operation model, and corporate governance?

The first product of WeBank – the "Particle Loan" - was quietly launched on the platform of mobile QQ on May 15, 2015.

Open the app of "Particle Loan", and the borrowing limit of the user is shown on the front page. Click "borrow", and then choose the loan amount and loan term, the system will rapidly show you the repayment date of every month and the due principal and interests. The borrowed amount can be sent to a bank card previously tied to the app immediately. The whole process is so smooth that the user will hardly feel any delay between the process steps.

Gu Min, president of WeBank, said that WeBank is not an ordinary bank dealing with traditional bank practices, but an internet financial platform.

As China's first bank that fully operates on "clouds", MYbank has strong big data processing ability, which has been successfully applied to the risk control of over 1.6 million clients of Alibaba small loans, involving a total of over 400 billion yuan loans.

The other three private banks also have their unique characteristics: Tianjin Jincheng Bank focuses on industries with great growth potential, such as automobiles, medicine, senior care service, energy conservation and environmental protection, and aerospace.

Following the experience of the Silicon Valley Bank, Shanghai Huarui Bank has started with investment lending to small science and technology enterprises, exploring a new financing mode that combines debt and equity, and Wenzhou Minshang Bank will mainly serve small and micro local businesses.

It is not easy to set up a new bank in China, especially when the bank is fully run on private capital. Wu Xiaoping, president of Jincheng Bank, said: "It will be a failure if we run the bank like a traditional one. We should avoid the traditional fields of the big banks and give full play to the creativity and market sensitivity that are unique to private banks." 

The article is edited and translated from《民营银行新在哪?》, source: People's Daily, author:Ouyang Jie.