Interview with Rongke He, Head of Intelligent Application Services, KPMG China: The improvement of systems and the stability of policies are the foundation for the sound development of the digital economy

Every reporter: Pan Ting Every editor: Zhang Yiming

The importance of digital finance in the development of the national economy is deepening. The Central Financial Work Conference held not long ago proposed to do a good job in science and technology finance, green finance, inclusive finance, pension finance, and digital finance, which has clarified the goals and tasks for accelerating the construction of a financial power and promoting high-quality financial development in the new era and new journey. As an important driving force for high-quality economic development, digital finance plays an important role in promoting the high-quality development of mainland finance.

How to understand the importance of digital finance, and what are the key points and difficulties that the mainland will face in the process of moving from a financial power to a financial power?

"Financial business is an important support for economic development. Benefiting from 40 years of reform and opening up and economic development, the mainland's financial industry and financial supervision have achieved rapid development. To achieve the goal of accelerating the construction of a financial power, we still need to make efforts to strengthen financial supervision, improve the financial system, optimize financial services, and prevent and defuse risks. He Rongke, Head of Intelligent Application Services, KPMG China, said in an exclusive interview with National Business Daily.

How does Herongke understand the responsibility of financial institutions in the context of vigorously developing digital finance? What are the unique views on how financial institutions should seize the important strategic opportunity period? The reporter conducted an exclusive interview with Herongke, and the following NBD stands for Daily Economic News.

He Rongke, Head of Intelligent Application Services, KPMG China Image source: Courtesy of the interviewee

Through digital means, financial institutions can reduce costs and increase efficiency

NBD: The digital economy has become a new driving force for global economic growth, and digital finance, as an important driving force for the high-quality development of the digital economy, plays an important role.

He Rongke: Under the guidance of policies such as the "14th Five-Year Plan for the Development of the Data Economy" and the "Overall Layout Plan for the Construction of Digital China", all walks of life across the country are accelerating digital transformation and realizing industrial upgrading through digitalization. As an important driving force for the high-quality development of the digital economy, digital finance has two connotations for financial institutions. From the perspective of financial institutions serving the real economy, financial institutions need to use digital capabilities to better promote the development of the real economy, and serve enterprises and individual industrial and commercial households through digital financial scenario innovation in channels, services, products, and operations.

NBD: After more than 40 years of reform and opening up and economic development, China has become a financial power, and the Central Financial Work Conference proposed to "accelerate the construction of a financial power". What do you think will be the key points and difficulties that the mainland will face in the process of moving from a financial power to a financial power?

Herongke: Financial business is an important support for economic development. Benefiting from 40 years of reform and opening up and economic development, the mainland's financial industry and financial supervision have achieved rapid development. In the latest 2023 Forbes Global 2000 list, there are 10 Chinese financial institutions in the top 100, surpassing the United States (7) and Europe (6). The establishment of the State Administration of Financial Supervision and Administration in May this year marks that the mainland's financial supervision has entered a new stage, which is of great significance to maintaining the smooth operation of the financial market and the steady development of the economy.

However, in order to achieve the goal of speeding up the construction of a financial power, we still need to make efforts to strengthen financial supervision, improve the financial system, optimize financial services, and prevent and defuse risks. The improvement of the system and the stability of policies are the foundation for the healthy development of the digital economy, and how to balance risks and innovation in regulatory policies, how to promote the use of digitalization to prevent risks, and how to achieve the high-quality development of the digital economy are the key issues that need to be considered in the regulatory field. In addition, building a financial power also requires the development of a global monetary status to match it. We need to continue to expand high-level financial opening-up, promote the internationalization of the renminbi, and serve the "going out" and "Belt and Road" construction.

Actively explore how to correctly examine the value and investment of science and technology

NBD: How can financial institutions seize the opportunities on their way to becoming a financial powerhouse?

He Rongke: The Central Financial Work Conference has very good guiding significance for the deepening reform and high-quality development of financial institutions. The financial institutions proposed in the meeting should do a good job in science and technology finance, green finance, inclusive finance, pension finance, and digital finance.

Taking technology finance as an example, because of the particularity of technology enterprises, it has always been a difficult problem for technology enterprises to obtain financing in banks. Based on big data, a regional bank has embarked on a unique path of innovation and development of science and technology finance through the business model innovation of "patent + talent + technology empowerment". For another example, the purchaser of pension insurance is often the demand side of pension services, and the amount of finance and services is almost the same. Insurance companies are actively exploring new financial services models of AI + pension, such as 24-hour automatic monitoring, critical value diagnosis and early warning, automatic calling, etc.

In addition to using technology to empower financial business to serve the real economy, financial institutions are also actively exploring how to correctly examine the value and investment of technology. Some financial institutions evaluate digital investment by building a technology maturity assessment framework and a technology effectiveness assessment model, so as to drive the direction and path of digital transformation, further release the value of science and technology, and achieve high-quality development.

NBD: The Central Financial Work Conference proposed to do a good job in five major articles: science and technology finance, green finance, inclusive finance, pension finance, and digital finance. How do you think doing a good job in the five major articles can be combined with improving the quality and efficiency of financial services in the real economy?

He Rongke: Earlier, we talked about many business scenarios in which the financial industry uses digitalization to empower the development of the real economy. But on the other hand, financial institutions are institutions that operate risks. With the comprehensive recovery of the mainland economy, it has also exposed the risks associated with the rapid development of the financial industry in recent years. Financial risk prevention and risk resolution are also the key topics of this financial work conference.

In terms of small and medium-sized financial institutions, the meeting emphasized the need to "strictly enforce the access standards and regulatory requirements of small and medium-sized financial institutions, carry out characteristic operations based on local conditions" and "timely deal with the risks of small and medium-sized financial institutions". It provides ideas and requirements for key solutions to the outstanding risk problems of small and medium-sized financial institutions and to promote the healthy and steady development of small and medium-sized financial institutions in the future.

In addition, emphasizing the "isolation of industry and finance risks", strengthening the supervision of the financial holding group, promoting the effective isolation of finance and industry, and preventing cross-contagion of risks are also one of the key tasks of local financial risk management, which will better improve the quality and efficiency of financial services for the real economy.

National Business Daily