A former vice-governor with the People’s Bank of China (PBOC) has called for Chinese financial regulators to accelerate efforts to create a “regtech ecosystem.”
In an article published by the Tsinghua Financial Review Wu Xiaoling (吴晓灵 ) , currently the director of the Tsinghua University Wudaokou Institute of Finance, highlighted the changes wrought in both the finance sector and the broader economy by ongoing technological advances.
“At present the whole world is facing a new wave of technical and industrial revolution, and the Chinese economy is in a key historic period of transition and upgrade,” writes Wu.
“Big data, cloud computing, artificial intelligence, the blockchain, mobile internet and the Internet of Things are greatly advancing changes to the lifestyles and consumption methods of people, as well as continually driving changes to the business and production models of companies.
“Against this background, global financial regulatory agencies are actively driving the creation of regtech, and the financial regulators of many countries are beginning to research and trial the use of regtech to regulator fintech and tech finance companies.
“China is benefiting from a looser policy and regulatory environment, and in recent years fintech and tech finance have obtained deep-seated development, which has also brought about some chaos, the fundamental cause of which is that there is no sound division between financial operations with spill-over effects and information process operations that service finance.
“For this reason financial regulatory departments must continue to strengthen technological regulatory measures, and use regtech to navigate the positive growth of fintech and tech finance, creating a positive ecosystem.”
Wu Xiaoling highlighted three areas of key focus and concern for China’s future regtech endeavours.
- “At present the staff numbers, knowledge structure and regulatory mechanisms of Chinese regulatory agencies will find it difficult to adapt to technological and market changes…personnel shortages and losses co-exist, and faced with a market with intention competition for talent, it is necessary to strengthen cooperation and communication with industry.”
- “The positive growth of organisations and markets is safeguarded by industry self-regulation and cooperation with regulators…organisations that engage in implementation themselves are best apprised of the importance and key aspects of problems. For this reason, strengthening industry self-regulation, cooperating with regulators and increasing regulatory capability is imperative for big tech companies with a sense of social responsibility.”
- “Scientific research is the keystone of the information revolution…regulatory agencies, industry associations, financial institutions, tech companies and university research institutions must jointly drive the integration of policy, industry, academia and research, to jointly create a fintech, tech finance and reg tech ecosystem.”