Risk control has been a focus of China's rapidly rising but highly unregulated online peer-to-peer lending business after a leading firm has been investigated for alleged illegal operations.

Qian Jingbo, chief risk officer of Guanqun Chicheng Investment Management Ltd, a leading online financing firm, said that the company is pursuing a "holistic" risk control approach to minimize potential credit defaults while seeking partnerships with third-party professional agencies to enhance risk management.

"We are looking to cooperate with international institutions to optimize our risk management system which is the core competitiveness of an online lending firm," Qian told reporters at a recent press briefing.

The online P2P lending business has been under the spotlight after ezubo.com, a leading Chinese P2P firm has been under government investigation for alleged illegal business operations.

The incident highlighted the rising risks associated with the business, which has seen explosive growth but lacks necessary regulation.

"We emphasize the balance between our business returns and risk control cost," Qian said. "If a firm's operating and marketing costs massively outweighed its investment returns, it means it has broken its first guard against risks."

Hua Wenwei, a partner of auditing firm Deloitte Touche Tohmatsu Ltd said that online financing firms lack sufficient investment of manpower and capital in their internal auditing system, which will create loopholes for potential risks.

Hua said that the tightened government regulation will likely lead to the collapse of a slew of firms that are not fully prepared for risk management.

"But it could bring merger and acquisition opportunities for companies that survive," he said.

Established in 2009, the Beijing-based Guanqun Chicheng has facilitated nearly 200,000 start-ups and small business to raise funds through its online platform, according to Qian. Total transaction value through its platform has surpassed 30 billion yuan ($4.64 billion) since last year.

"The Internet financing business in China is experiencing rapid growth while many problems have emerged. Industry reshuffling is inevitable and it is a necessary transition before it achieves healthy growth," the firm's chairman Liu Guangdong said.