Across The Border | PBOC considers new tactics in battle to regulate fintech
Proposals have included the use of artificial intelligence and other innovative regulatory technologies that can help monitor and screen for fraud
China's booming fintech sector is drawing closer scrutiny from regulators who are confronted with the dilemma of how to establish better monitoring without the regulatory overreach that would stifle innovation in the sector.
The People’s Bank of China (PBOC), the country’s main financial regulator, has recently set up a fintech committee and stressed that it will adopt artificial intelligence (AI) to better monitor fintech players and meet their expanding missions.
“Fintech is growing really fast in China, which has become a global leader in the field. In such a big financial market, the industry has a powerful internal dynamic,” said Sun Guofeng, director of PBOC’s research institute, at a public forum in Qingdao city on Saturday.
“It poses a great challenge for regulators to control risks deriving from the disruptive emergence of the industry.”
Fintech firms typically use technology, such as mobile phones and cloud computing, to provide more affordable and easier-to-access financial services to a wider population, from online loans and insurance to e-payment and crowd-funding investment.
In 2016, investment in China’s fintech firms more than tripled to a record US$10 billion, surpassing the US for the first time and accounting for 43 per cent of global fintech investment, according to Accenture,which compiled its findings based on data from CB Insights.