Core Insights - The "Future Banking Conference 2025" hosted by New Hope Financial Technology focused on key issues in the banking industry such as net interest margin, risk management, interbank competition, and digital transformation, attracting over 600 executives from more than 200 banks nationwide [1] Group 1: Retail Credit Risk Management - New Hope Financial Technology's CEO, Xu Zhihua, emphasized that retail credit does not exist in a "zero-risk" state but rather has characteristics of "small amounts, dispersion, and allowance for a certain level of risk" [1][2] - Xu's observations are based on the 1.2 trillion yuan in loans facilitated by New Hope Financial Technology, primarily consisting of small loans of 10,000, 20,000, and 30,000 yuan [2] - A mathematical model presented by Xu identified three key characteristics of retail credit risk: asset distribution shows a left-skewed distribution of approved customers, bad debts spread linearly from low to high-risk customers, and a stable inverse relationship between final bad debt rates and model scores [2][3] Group 2: Risk Release Characteristics - Xu noted that the risk release of retail credit assets is inherently "non-uniform," with a rapid increase in risk typically occurring between 18 to 24 months after business initiation [3] - Many banks have historically paused operations during this critical phase due to rising risk indicators, potentially missing out on development opportunities [3] Group 3: Long-term Strategy and Profitability - A simulation of a single batch of credit assets revealed that in certain pricing and risk scenarios, losses could occur in the third year, leading to a potential short-term focus that could overlook long-term strategic value [3][4] - Continuous lending and borrowing processes over a 10-year period showed that net yield curves fluctuate in the first few years but stabilize later, highlighting the importance of maintaining business development for long-term profitability [4] - Xu likened the management of retail credit to riding a bicycle, where initial instability gives way to steady progress once momentum is achieved, underscoring the need for a long-term, stable development strategy [4]