Inthemeantime,financialtechnologyisbecomingessentialtoenhancefinancialsupervision.SinceApril,sevenlocalfinancialsupervisionauthoritieshaveequippedthemselveswithriskcontrolmodelssimilartotheonedevelopedbyAntFinancial,anAlibabaaffiliate,andmorelocalfinancialsupervisionauthoritiesarepreparingtocooperatewithfinancialtechnologyinnovationfirms.
TherecentP2PcrisiswascausedbyboththetightenedmonetarysupplyandthemalpracticesofP2Pplatforms.TheriskyoperationsofP2Pplatformsarethecorereasonfortheirproblems.
InChina鈥檚Internet-basedfinanceindustry,therearefirmsthatarefullycompliantandcapableofcontrollingrisksbyfullyus-ingfinancialtechnology.Someindustrialleadersareevenabletoselltheirtechnologiesandsolutions.
Undersuchcircumstances,P2Pplatformsmustmakeimprovementsnotonlyforthemselvesbutforthewholeindustry.Supervisionmustbeenhancedtoleadtheindustryoutofdifficulties.
Upgradingsupervisionthroughtechnology-drivenfinancialinnovationcansolvethemosturgentissueintheInternetbasedfinanceindustry:informationasymmetrybetweenthesupervisorandtheindustry.
IntheP2Pindustry,malpracticesareoftenhighlydisguised,sowithoutthehelpoffinancialtechnology,itwouldbeimpossibleforthesupervisortodetectthemandrealizedynamicandprecisesupervision.
ThisiswhythefinancialtechnologycommitteeofthePeople鈥檚BankofChinavowed,whenitwassetupinMay2017,toincreasetheuseofregulatorytechnologytoboostthecapabilitiesinidentifying,preventinganddissolvingfinancialrisks.Thisincludesbothcross-sectorandcrossmarketrisks,usingtechnologysuchasbigdata,artificialintelligenceandcloudcomputing.
Upgradingsupervisionthroughtechnology-drivenfinancialinnovationwillalsoprovidefutureoptionsforthedevelopmentpathoftheInternet-basedfinanceindustry.Chinahasnowbecomeaworldleaderinmanysectorsoffinancialtechnology,suchasmobilepayment,sotheapplicationofsimilartechnologiesisverypromising.
Fortheabovereasons,topreventfinancialriskswithtechnology-driveninnovationwillbegreatlyconducivetotheformulationofdevelopmentplansandinnovationpaths,thedecisionofsupervisionorientationanddetailsaswellastheidentificationofrisksintheInternet-basedfinanceindustry.Forthisindustry,withitsdistinctnatureoftechnologyandrapidgrowth,appropriateandtargetedindustrialsupervisioniswhatwereallyneedforfuturedevelopment.
Aftercompetitionweedsineligibleplayersoutofthemarket,financialtechnologywillbetheonlyfocusforthedevelopmentoftheindustryofInternet-basedfinance.Technologyevolutionfollowsitsownlaws,andweneedtobeoptimisticaboutit.
Inthemeantime,sinceindustrialleadersareverylikelytoparticipateintheformulationofindustrialstandards,theiropennesstotechnologywillfacilitatenotonlythedevelopmentoftheindustry,butalsotheupgradingofsupervision.Thisisalsopartoftheirsocialresponsibility.
ThisisaneditedexcerptofanarticlewrittenbyindependentfinancialcommentatorYangGuoyingandpublishedinNationalBusinessDailyCopyeditedbyFranciscoLittleCommentsto