BEIJING - With more of China's financial institutions exploring facial recognition, Chinese borrowers will find it easier, and safer, to secure small loans online.

Rong360.com, China's self-styled "financial supermarket," will use SenseTime, facial recognition software developed by Chinese scientists, to help link its nearly 10,000 financial institutional clients with customers.

The biggest risk with online transactions of any kind is identity theft, this is the primary obstacle China's online financing services are trying to solve, said Ye Daqing, CEO of rong360.com.

Over the past four years, rong360.com has received online loan applications for three trillion yuan ($460 billion), extending loans worth 300 billion yuan.

Although this is a fraction of the nation's total loans, the momentum is inspiring and by the end of the year, China's online loans might exceed one trillion yuan, said Ye.

In 2015 alone, financial institutions posted 94 trillion yuan in outstanding loans denominated in yuan, an increase of 11.7 trillion yuan from the previous year, according to the National Bureau of Statistics.

"Explosive growth is to be seen in China's online financing market, which has potential exceeding the United States," Ye said.

Credit investigation

A special challenge China can not dodge, however, is the brutal reality of an inefficient and less-developed credit system. Improvements will largely depend on the rapid accumulation and sharing of personal credit information.

Xu Li, founder and CEO of SenseTime, said through this cooperation, urban commercial banks, share-holding banks and financial service agencies would no longer need to build new outlets.

"Soliciting customers through the Internet will be more cost-efficient," said he.

Facial recognition can automatically confirm the identification of a loan applicant, bringing up an applicants demands and credit history, and match their preferences with the products of financial institutions.

"The reward for technology developers like SenseTime will be access to data, which will help to improve the accuracy of human facial recognition and improve the application," said Xu.