A former Deputy Governor for the People’s Bank of China (PBOC) has called for greater international coordination when it comes to regulation of the global fintech sector.
Li Dongrong (李东荣) said that it is necessary for international organisations such as the World Bank, the International Monetary Fund and the Financial Stability Board to strengthen assessment and risk monitoring of global fintech, and explore the establishment of mechanisms for the sharing of global fintech regulatory information, as well as joint-risk responses and crisis handling arrangements.
Li made the remarks in Beijing on 12 December, during a keynote speech delivered at the “2019 New Era Financial Development Summit” (2019新时代金融发展峰会) held by Financial News (金融时报社).
Li also called for the accelerated development of international fintech standards to cover areas including internet security, cross-border payments, data regulation, anti-money laundering and anti-terrorist financing.
“While fintech brings economic and social benefits, at the same time it could also bring overlapping effects and diffusion effects when it comes to risk in areas including operations, technology, the internet and data, bringing even more challenges to financial regulation and social stability,” said Li.
Li highlighted five key focal areas for global fintech regulation in future:
- Focus on the “across-the-board” nature of fintech operations, and including them in existing financial regulatory frameworks for tier-based and category-based regulation based on operations functions.
- Focus on whether fintech activities involve raising funds from the public, public bond issuance or asset management and transactions, and uphold strict regulation of entry into these areas.
- Greater focus on information disclosures and protection of consumers as financial services become increasing digitised and online.
- Focus on usage of digital technology to improve regulatory procedures and capabilities – use regtech to regulate fintech.
- Explore the implementation of regulatory sandboxes, innovation incubators and other new regulatory tools, in order to provide space for the development of truly valuable fintech innovations.