China's first Internet bank opens amid cloudy regulations

While the central bank demonstrated willingness to accommodate internet-based financial services, it also has reservations. According to its draft ruling, the accounts would be limited to wealth management products only. Cash settlement, payment and reception would not be permitted.

Credit profiling

Webank has said that it will issue loans based on credit rating scores from Tencent's social data, as the central bank last year allowed eight organizations, including Tencent and Alibaba, to establish their own credit-rating agencies.

This unorthodox approach goes against the established system used by traditional lenders, which rely mostly on the central bank's credit system and their own investigative work.

Some in the banking industry doubt whether Tencent's social data can accurately reflect Webank client's creditworthiness. Webank said its model will consider a slew of online activities, including log-on time on Tencent's messaging services, virtual assets, gaming, online purchases and transactions.

Tenpay, Tencent's payment subsidiary, also holds a 20 percent share of China's online payment market, according to iResearch. Its rival Alipay, the payment service owned by Alibaba, dominates with nearly 50 percent.

Yet skeptics argue that such data says more about a person's social qualities than solvency.

"Social data does not account for much even in the risk-control model of Internet finance companies." said Shi Pengfeng, CEO of Wangdaizhijia, a Shanghai-based P2P lending platform.

Shi added that the amount of data was not an important factor, rather, its relevance to a client's credit profile.

Despite doubts, analysts say these new agencies, using their own resources for credit-profiling, will complement the central bank's credit reporting service. Some banks would not issue loans to some small firms and individuals as the central bank's system lacks adequate information on their credit worthiness.

Thus, these new rating agencies are expected to facilitate access to financing.

Acknowledging such problems, in the past the central bank has incorporated credit information from local micro-loan firms to boost its own system's credit profile.