Financial regulation

China collects trove of 3 trillion financial records in bid for tighter control of country’s banks

Speech given on behalf of chairman of China Banking and Insurance Regulatory Commission, Guo Shuqing, claims massive data haul can be used to improve regulation

PUBLISHED : Wednesday, 09 May, 2018, 9:00pm
UPDATED : Thursday, 10 May, 2018, 12:23am

China has amassed a dizzying collection of 3 trillion banking records in its drive to exert effective regulatory control over the nation’s financial institutions in the digital age.

The big data mountain – made up of bank accounting records, transaction data and related information – is a powerful illustration of how Beijing is using information technology as a key tool in pursuit of regulatory effectiveness.

The data trove was revealed on Wednesday in a speech delivered on behalf of Guo Shuqing, chairman of the country’s powerful new China Banking and Insurance Regulatory Commission (CBIRC), at a forum on financial stability in Hong Kong.

Veteran technocrat Guo was appointed head of the new commission in March  and is seen as a key enforcer of President Xi Jinping’s drive to steer China away from the threat of financial crisis posed by the pace of technological change and the global fintech revolution.

Speaking at the inaugural conference of the Alliance for Financial Stability with Information Technology (AFS-IT), Dr Fan Wenzhong, director general of the commission’s international division, said he had been entrusted by Guo to deliver a “tribute” to those involved in setting up the new Hong Kong and Macau-based alliance. 

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Along with others from across Asia, the CBIRC is playing an active role in the new alliance.   

Outlining what he described as “the great importance the CBIRC places on the use of information technology” to enhance regulatory control, Fan said: “By the end of 2017, the cumulative collection of banking financial institutions’ accounting records, transaction data, and various types of management data amounted to nearly 3 trillion records, covering 2,755 legal entities and 711 first-tier branches.” 

He noted that “current financial data has increasingly become a core economic resource of the society” and new digital trading platforms needed to be supervised to “improve the transparency ... ensure their commercial openness, and prevent the emergence of opaque [and] dark areas throughout the financial system”. 

Wednesday’s launch of the AFS-IT saw central bankers, financial regulators and monetary authority officials from across the Asia-Pacific region meet for the first time.  

Co-chair of the alliance Clarie Lo, a former deputy secretary for financial services and the treasury in Hong Kong, told the forum: “We really mean business. Developments in digital technology move extremely fast and we simply must keep up.” 

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Lo announced the setting up of a working group whose ultimate aim was to grow the new alliance into a truly global platform which – as an independent, non-official body free from the legal and policy constraints which often limit government action – would come up with innovative solutions to the regulatory challenges and threats posed by the fast-paced fintech revolution. 

However, Hong Kong’s privacy commissioner for personal data, Stephen Wong Kai-yi, sounded a note of caution about the dangers of over-regulation and compliance requirements put in place for banks and financial institutions. 

Wong said in order to ensure the city’s reputation for the free flow of information and consumer rights, “customers must be told the reasons for them being asked for information, what was voluntary and what was obligatory”.  

He also sounded a warning about what he called the sometimes “robotic” nature of artificial intelligence when applied to compliance procedures, saying proper explanations must be given to customers.