A law professor from one of China’s leading universities says that government needs to adopt data-driven regtech measures in order to keep pace with the latest fintech advances.
Yang Dong (杨东), vice-head of the law faculty at Renmin University, said that technological advances had led to quantitative and even qualitative changes in the nature of financial risk, creating new forms of risk that are technical, operational and systemic in nature.
These changes have made many of the regulatory methods adopted by China’s financial authorities outmoded.
“Because China’s traditional financial regulatory institutions suffer from persistent weaknesses such as information asymmetries and lagging regulatory technologies, traditional financial regulatory methods are already unable to meet the challenges brought by new forms of financial risk,” said Yang.
“For this reason, we urgently need to strengthen financial risk regulation capabilities.”
Yang made the remarks during his keynote speech on “Regtech: Fintech’s Regulatory Challenges and Dimension Construction” at the “New Era Chinese Financial Market Infrastructure and Legal System Establishment Forum (新时代中国金融市场基础设施法治体系建设论坛) in Beijing on 28 June.
According to Yang, China should deal with the changes and shocks brought about by fintech by adopting “data-driven financial regulatory methods,” as well as undertake financial regulation in accordance with the principles of “data collation, sharing, analysis and decision-making.”
Yang pointed to several “paths” for the implementation of regtech in China, including “distributed” and equal regulatory mechanisms, smart and dynamic regulatory mechanisms and trial regulatory sandbox mechanisms.