Chinese fintech lender picks Baidu-Citic digital custodian

X Financial, a digital personal finance company in China, announced that it has engaged Citic AIBank as its custodian bank for its online lending platform, Xiaoying Wealth Management. AIBank’s custodian services are now fully integrated within Xiaoying’s systems following two months of stringent testing involving more than 30 teams of over 270 engineers.

AIBank will provide fund custodian services including settlement, accounting, clearing services and safeguarding online lending capital to Xiaoying. To ensure security and remain compliant with recent regulations, all borrower and investor funds will be managed independently by AIBank once the transfer of all custodian funds has been complete and IT systems have been linked.

Going forward, each investor and borrower must create a separate custody account with AIBank to ensure that their capital, repayments and interest are managed independently from X Financial.

AIBank was founded as a direct banking joint venture in 2017 by China Citic Bank and Baidu and uses big data and artificial intelligence to offer services over the internet instead of through physical branches. AIBank was one of the first 25 banks to receive approval and be whitelisted by the National Internet Finance Association of China as part of the regulatory compliance inspection campaign launched by the Chinese government in August 2018.

Justin Tang, founder, CEO and chair of X Financial said in a statement: “We are excited to work with AIBank which was founded to focus on providing direct banking services and explore opportunities in China’s burgeoning fintech sector. AIBank is a highly-respected institution that has developed cutting-edge technology and algorithms that will further strengthen trust and security in our online lending platform, provide significant competitive advantages, and improve our overall competitiveness.”

Read the full release

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