Yi Xianrong: How should China's financial technology develop healthily?

Recently, Chinese Min min bank issued the "Financial Technology (FinTech) Development Plan (2019-2021)" (hereinafter referred to as the "Planning"), which clearly puts forward the guiding ideology, basic principles, development goals, key tasks and safeguard measures for the next three years of financial technology work. The Plan points out that fintech is technology-driven financial innovation. In accordance with the requirements of the National Financial Work Conference, adhering to the basic principles of "integrity and innovation, safety and control, inclusive people's livelihood, openness and win-win", give full play to the enabling role of financial technology, and promote the high-quality development of China's financial industry. The "Planning" puts forward the idea of the development of China's financial technology in the next few years from six aspects. For example, fintech strategy, rational use of fintech, how to improve the efficiency and quality of financial services, fintech risk prevention, fintech supervision, and consolidating the foundation of fintech.

It can be said that under the guidance of this "Planning", the future development of China's financial technology will gradually move towards the road of healthy and sustainable development. However, affected by the impact and impact of the P2P risks that broke out in China's financial technology in the previous stage, its thinking should not be too cautious, but should be more open on the basis of in-depth reflection on the development of China's financial technology in the previous stage, so as to create better conditions for the future development of China's financial technology. It can be said that this is the driving force for the development of China's financial industry in the future.

We should see that since the introduction of financial technology into China in 1999, China's financial technology has seen unprecedented development, which has brought new weather and efficiency to China's financial industry, such as WeChat Pay and Alipay, which have made financial technology widely popular in China in a short period of time, and the efficiency it brings is unprecedented. In the past, resident remittances were handled at the post office, not only did the sender and the recipient spend at least a long time queuing up at the post office, but also the time that their remittances were received was long and the cost was high. But now just do it on your smartphone and you can do it in a second. The current remittance efficiency advantage and cost advantage are fundamentally incomparable to the previous business. This is true of the financial services of individuals, as is the financial services of many businesses. Therefore, the rapid development of financial technology in China, its results are very huge. In the future, the efficiency and role of financial technology will be greater.

However, due to the lack of preparation in terms of concepts, theories, cognition, etc., due to the failure of the legal system to keep up, coupled with the "barbaric" growth of China's financial technology since 2013, this has made the development of China's P2P in 2013 muddy, thus making digital currencies and ICOs in China, etc., which naturally triggered a lot of risks in China's financial market. For the latter, the Chinese government quickly issued a document banning operations in China; for the former, the government adopted a regulatory approach hoping to minimize the risk of P2P. As far as the current situation is concerned, digital currencies and ICOs are basically controlled in the germination period, and the risk of P2P is still spreading. Therefore, the "Planning" released this time is also hoping that in the future, China Rong Technology can develop healthily on this basis.

For the Planning, the focus is on the top-level design of the future development of the fintech market, which in a sense is possible. However, the focus of the government's top-level design is not on the formation of financial technology market mechanisms, which can only be selected by market entities through reasonable institutional arrangements and formed by market entities in operation. For the future development of financial technology in China, the focus of government planning should be on the design of legal system arrangements in advance. For example, the current P2P problem in China is that the early regulators did not understand the nature and connotation of P2P, allowing enterprises to enter freely without registration and access. When non-financial enterprises and individuals conduct financial business, the problems and risks they face immediately erupt. But in fact, the financial industry is a franchise industry, and it can only operate under strict licensing arrangements. In these aspects, Chinese regulators can learn more from Hong Kong and Singapore, Which have strict market access systems for engaging in financial technology. In addition, the EU's open banking system arrangements also adopt a strict market access regime. Therefore, a legal system with strict design and arrangement is an important part of ensuring the healthy development of financial technology.

Moreover, now that society has entered the era of digital civilization, the digital revolution and the impact and impact of the digital economy on the traditional economy should be just the beginning, and the same is true for financial development. Therefore, we should consolidate the basic support of financial technology, continue to improve the ecology of the financial technology industry, optimize the industrial governance system, and support the healthy and orderly development of financial technology from the aspects of technical research, regulatory construction, credit services, standards and norms, and consumer protection. In other words, the infrastructure construction of fintech is one of the most important ways that the government must provide. For example, the national data platform, the national financial data platform, the financial data sharing platform, etc. with the nature of public goods, and for now, China is very lacking.

For example, in Asia, on July 18, 2018, the Hong Kong Monetary Authority of Hong Kong, China, proposed a roadmap for four phases of the Banking Industry Open Application Interface (API), which includes: the first phase of open banking product information inquiry, such as interest rates, exchange rates, credit card interest rates, etc., which is expected to be launched within 6 months; the second phase of open product applications, such as credit card application, online account opening, online insurance for travel insurance, etc., is expected to be launched within 12 to 15 months; and the third stage of open account information inquiry. For example, the information in the account of the customer can be queried so that the third party operator can develop more customized financial services for the customer; the fourth phase opens up financial transactions, such as issuing and processing e-Cheque, bill payment, processing transfers, etc.; the third and fourth phases are expected to evaluate the situation within 12 months before announcing the launch schedule. Meanwhile, the Hong Kong Monetary Authority of China has begun to provide an open API on its website on 23 July 2018, gradually opening up all financial data and important information published on the website (about 130 groups). From 23 July, the 50 most commonly consulted financial data and information by the public will be opened. The remaining 80 sets of materials and information will be opened by mid-2019. It can be said that similar financial data sharing platforms have become the most important aspect of the sustainable development of China's financial technology in the future. That is to say, for the current development of China's financial technology, the more sufficient the data sharing and financial data sharing platform provided by the government with the nature of public goods, the more China's financial technology can develop healthily. But for now, China is relatively weak in these areas. However, after the promulgation of the Plan, these aspects can be the focus of its development.

Red Star News signed author Yi Xianrong

Edited by Yu Mengxiang