The development of Internet financing, however, is not aimed against traditional financing institutions, even though it has facilitated changes in and poses a challenge to the traditional market. Internet financing can play a supplementary role to the capital market since the latter is encouraging an increasing number of small parties to join the market.

Having said that, it seems Internet financing is not that useful for transactions between big parties. Nevertheless, it can use its advantages to serve more individual (but small) investors. And by compiling a huge volume of data and developing cloud computing, it could improve the credit system as well.

Informatization can help traditional financial institutions to use Internet financing as a mode of operation. Of course, informatization has to be based on Internet technology and has to be carried out in three main areas.

First, traditional financial services should be made available online. In fact, most banks have already started developing their online-banking and mobile-banking business. For example, only about 40 percent of Bank of China's traditional financial business is now transacted over the counter.

Second, banks should allow clients to use the Internet without a time limit to transact business. Actually, China Minsheng Bank and Bank of Beijing are already allowing their clients to do so.

Third, banks should catch up with private enterprises in e-commerce. For instance, they should follow the example of China Citic Bank, which is working with Alibaba and Tencent to issue virtual credit cards.

If 2013 was the year when a new era in Internet financing started, 2014 could be the year of revolutionary developments. Internet financing has forced traditional financing institutions to undergo certain changes; now it is expected to transform them.

The author has the book, Internet Finance, to his credit.