Ant Group’s IPO could be revived after ‘problem solved’, hints China’s central bank governor
- Yi Gang said Ant Group situation is a ‘complicated issue’, noted its payments business continues as normal
- PBOC governor said there needs to be more international cooperation on regulating fintech, particularly on consumer data
Regulators abruptly shut down Ant Group’s US$34.5 billion dual listing in Shanghai and Hong Kong in November over concerns that the world’s largest financial technology company posed a systemic risk and was violating consumers’ privacy. Soon after, Beijing announced a raft of new fintech regulations and an antitrust inquiry into the nation’s technology sector.
Speaking during the World Economic Forum’s Davos virtual conference, Yi, the governor of the People’s Bank of China (PBOC), said regulating the Ant Group situation was “a complicated issue”, but stressed that the pulled IPO and restructuring had not disrupted payment services to the public.
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Chen Yulu, a PBOC deputy governor, said last week that Ant was working to rectify problems in accordance with targets set by regulators.
Ant Group previously said it planned to use a subsidiary, Zhejiang Finance, to satisfy a requirement by regulators that fintech companies set up a financial holding company and apply to the central bank to do so by November 1.
On Tuesday, Yi said that financial innovation in the mainland has been beneficial, particularly in encouraging financial inclusion and lowering transaction costs. However, he said there were risks in terms of consumer protection and misuse of monopoly power.
“The key point is: while you have an environment that encourages financial innovation, at the same time, the legal framework has to be very clear,” Yi said. “For example, the ownership of the data and how to protect consumer privacy and also how to safeguard [against] the abuse of some monopoly power, that is very important.”
He noted the PBOC recently announced regulations on third-party payments, mobile payments and consumer data protection.
Yi also called for greater international cooperation to protect people’s data, citing two recent laws adopted by the European Union – the Digital Services and Digital Markets Acts.
Because of its cross-border nature, fintech – and innovation in the industry – would be better served by international cooperation between Europe, the United States and other developing countries, Yi said.
“Jointly, we can get closer to a common consensus for the regulatory framework,” he said. “That would be a benefit to everybody, especially a benefit to the low-income people using inclusive finance.”
