Wang Pengbo, chief analyst at market consultancy Botong Analysys, said small and medium-sized lending facilitation institutions that previously relied on multiple layers of customer referrals and profited from reselling traffic through various channels will be rapidly pushed out of the market. Wang expects that in the future, competition across the industry will shift from simply competing for traffic to competing on compliance capabilities.

　　Tian Lihui, a finance professor at Nankai University, said the old business model based on the formula of high interest rates to cover high risks and multiple layers of customer referrals to spread costs has effectively been dismantled by three sets of constraints: caps on comprehensive financing costs, mandatory disclosure requirements for marketing and stricter standards for debt collection.

　　Tian said demand for credit has not disappeared, but is instead shifting from marginal borrowers whose risks are difficult to price, toward mainstream borrowers whose risks can be more accurately assessed and priced.

　　Industry experts said the focus of the internet-facilitated lending sector has now shifted from extensive scale expansion to more refined customer selection and risk cleanup. Lending facilitation institutions are gradually eliminating customers with weaker credit profiles and higher risks and tightening lending standards to meet regulatory compliance requirements. At the same time, the industry as a whole is accelerating the process of clearing out risks.

　　Some lending facilitation institutions said they will leverage the technological capabilities they have accumulated in risk-control technology, system development and user operations to provide standardized technology solutions to licensed financial institutions.