The head of one of China’s big state-owned banks has highlighted the risks that could be created by the increasing digitisation of financial activity.
Wang Jiang (王江), president of China Construction Bank, said that the digital transformation of the Chinese economy and finance sector won’t eradicate risk at all, but will instead led to “increasingly complex and variable manifestations of risk.”
According to Wang this will place greater demands upon the risk management systems of commercial banks, making it imperative for them to implement “comprehensive smart conversion” and modernisation.
Wang made the remarks in a speech delivered on 11 June at the 13th Lujiazui Forum held in Shanghai.
“Tech risk, data risk, fraud risk, model risk, Internet security and various new forms of risk are already hard to overlook,” said Wang.
“At the same time ways for various forms of risk to overlap and spread are more numerous, rapid and hidden…the overlapping and conjoined effects of different forms of risk is more pronounced, and a single incident can affect the entire system.”
Wang called for the “accelerated development of modern risk control systems that are adapted to digital transformation.”
“In the digital era there is no change to the intrinsic character and logic of risk control for commercial banks – the only thing is that there are greater demands when it comes to the development of smart risk control systems.”