This will allow them to provide a cost-efficient lending services solution to a growing number of small businesses. Such a close level of collaboration between a traditional bank and a mature P2P platform is the first of its kind in China.

According to the agreement, Bank of Suzhou will set up a dedicated P2P department, while Dianrong.com will build the P2P platform, provide the technology and related products and services. The platform will be operated jointly.

According to Bank of Suzhou chairwoman Wang Lanfeng, "everyone knows that it's difficult for small businesses to borrow in China. Traditional banks have not provided them with sufficient services; if we can draw on leading Internet technology to remedy these shortcomings then we will make a big difference for Chinese small businesses' fund-raising efforts."

Wang added, "We see the potential for combining the most advanced online underwriting technology with a traditional bank's solid lending experiences. By doing so, we can expand small business's access to financing and reduce the cost of lending dramatically."

Bank of Suzhou is a regional commercial bank in China's Yangzi river delta. Their strategic concept is to focus on the customer; the bank already has 128 service locations covering Jiangsu province's main prefecture level cities and townships within Suzhou municipality. Bank of Suzhou is the province's most capable regional commercial bank. In the "2013 Jiangsu, Zhejiang & Shanghai Local Bank Competitiveness Rankings," Bank of Suzhou's profitability ranked number one.

What further sets them apart is their ability to provide small-scale financial services customized to regional customers' needs. Wang, the bank chairwoman, believes that regional commercial banks have the opportunity and the capability to do things differently from large banks and financial service providers. "Small businesses will be and financial service providers. "Small businesses will be an area of growth for regional commercial banks in the future. At the same time, traditional banks need to realize that market changes driven by the Internet should be seen as a positive force transforming their management. Traditional banks must embrace the changes that the Internet has to offer."

Wang indicated that they chose Dianrong.com as a partner because Dianrong.com is the most technologically advanced P2P platform in China. The bank expects innovation with the help of Dianrong.com's mature technology, to offer new financial products that did not exist before, and to better serve small businesses. This will allow the bank to take the lead in the transformation of the banking industry.

Since its founding, Bank of Suzhou has consistently strived to serve both the Suzhou metropolitan area (population 13 million), and Jiangsu province as a whole (population 79.4 million). While it's not clear what attitude most banks have towards P2P, Bank of Suzhou has astutely found the advantages of Internet technology. Relying on Dianrong.com's P2P technology support, Bank of Suzhou expects to serve more customers, and expand outside the province.

Soul Htite, the founder and CEO of Dianrong.com, is also the co-founder and former Head of Technology at Lending Club, the world's largest P2P platform. In 2012, Soul Htite, together with Kevin Guo, a finance and equity lawyer, founded Dianrong.com in Shanghai. They were determined to reduce the interest spread between lending and borrowing with the help of Internet technologies.

Kevin Guo said, "We are very pleased to have the opportunity to work with Bank of Suzhou, a bank with a strong awareness of market needs. Dianrong.com is a company with a strong culture of innovation. Together we believe that Bank of Suzhou and Dianrong.com can find a new way to serve small businesses in China."

At present, some banks have chosen to build P2P platforms by themselves or invest in a P2P platform in an effort to enter the small business financial services market. But they have not offered any improvements to traditional business models. Bank of Suzhou and Dianrong.com's collaboration merges the best offerings of a traditional bank and a mature P2P platform. It is expected to be a meaningful trial effort and a milestone in the banking industry both in China and globally.