In recent years, China has further promoted the strategy of innovation-driven development, taking technological innovation as an important support for improving social productivity and overall national strength. In the process of transformation and upgrading of the financial industry, innovation leadership and technology-driven play a huge role, forming a development trend of financial technology “thousands of competitors, innovators win”. At the same time, preventing and mitigating financial risks is the eternal theme of financial work. How to maintain financial security while encouraging innovation poses great challenges to regulatory authorities. The People’s Bank of China deeply implements the decision-making and deployment of the Party Central Committee and the State Council, insists on the “two-handed grasp” of development and supervision. While promoting the implementation of the “FinTech Development Plan (2019-2021)”, it strengthens the top-level design of financial technology supervision and explores Establish an inclusive and prudent fintech innovation trial and error tolerance mechanism, strive to create a fintech innovation monitoring tool that meets China’s national conditions and is in line with international standards, continuously improve the professionalism, uniformity and penetration of supervision, and promote fintech’s integrity, safety, and universality The road of benefit and opening up is stable and long-term.
Design concept of new innovative regulatory tools
Break the dilemma of “death in one tube and chaos in one release” to improve the applicability of supervision. In the era of financial technology, financial services are more diverse, business boundaries are more blurred, and the risk situation is more severe. The effectiveness of financial supervision is facing new challenges. The traditional innovative supervision model has “failure” to a certain extent. Regulatory departments urgently need to encourage practitioners to take the initiative to innovate on the premise of protecting the legitimate rights and interests of financial consumers, and be able to detect and avoid innovation defects and hidden risks in a timely manner. The People’s Bank of China is creating a new type of innovative supervision tool, which is to deal with the relationship between security and innovation. In view of the fintech innovation situation in China, we have explored a financial technology that can not only maintain the bottom line of security, but also tolerate reasonable innovation and highly adapt to China’s national conditions. The road of supervision effectively solves the dilemma of “death in one pipe and chaos in one pipe” faced by innovation supervision, and regulates and guides the healthy and orderly development of financial technology.
Abandon the simple “one size fits all” model and enhance regulatory inclusiveness. From historical experience, proper supervision is the key to the effectiveness of financial supervision. Too little supervision can easily lead to a large number of fraudulent products flooding the market, thereby damaging the legitimate rights and interests of financial consumers; while too much supervision can easily lead to excessive compliance costs for practitioners, thereby reducing innovation vitality. Therefore, what kind of supervision intensity the new innovative supervision tool chooses is an important factor considered by the supervision department. At the beginning of the design, the People’s Bank adhered to the concept of inclusiveness, actively abandoned the “one size fits all” model, and actively explored new, more instructive, inspiring and inspiring new flexible regulatory methods, establishing strong and flexible, A flexible innovation trial and error tolerance mechanism , enhance the exchange of information and benign interaction between regulatory authorities, innovation entities, and the public, create a regulatory model that conforms to the internal development laws of new things, and create an inclusive financial technology innovation environment .
Introduce a “multiple linkage” public supervision mechanism to improve the effectiveness of supervision . China’s financial institutions are numerous and service innovations are on the rise. The traditional “government supervision + institutional autonomy” model is facing greater challenges. Introducing more external forces to participate in supervision is an effective means of optimizing innovative supervision models. The general public is the ultimate service target of financial products, and they have a say in the safety and convenience of innovative applications. To this end, the new innovative regulatory tools have introduced a public supervision mechanism to give full play to the role of different social subjects, so that financial consumers can have a deeper understanding of the functional essence, potential risks and compensation measures of innovative products, and better safeguard their own legitimate rights and interests; let the news media Play the role of social “radar” , supervise the safety, compliance and legality of innovative products; let third-party professional forces participate in pre-checks, comprehensively evaluate the reliability and effectiveness of safety protection measures; let industry organizations Strengthen the role of self-discipline and restraint, and better support the operation of new regulatory tools. These multi-linkage public supervision mechanisms help to build a coordinated and co-governance risk prevention and control governance system and enhance the effectiveness of innovation supervision.
Set a “rigid threshold” for innovative applications, emphasizing regulatory prudence. Financial technology development cannot follow the old path of Internet finance. It must pay attention to both flexible supervision and prudential supervision. To a certain extent, technology-driven financial innovation is an activity to explore the unknown field. Facing uncertain factors, risks and variables go hand in hand. Once the risk is ignored, it is likely to make a big mistake. The lessons of Internet finance in the past few years have shown profoundly that blindly deified information technology can not only promote the development of financial services innovation, but will make the financial markets mixed and financial products uneven, which will bring great challenges to financial stability. To this end, new innovative regulatory tools emphasize prudential supervision and strive to set a rigid threshold. From a financial perspective, adhere to the essence of financial technology is finance, strictly implement the principle of financial license operation, and strictly prevent illegal financial activities such as illegal fund-raising and financial fraud under the banner of “fintech”. From a scientific and technological point of view, a clear risk bottom line and safety standards, and a risk control system for dynamic risk monitoring, perception, and efficient disposal can ensure that truly valuable new scientific and technological achievements are fully tested and iteratively improved, and ultimately inject technological power into financial innovation.
Research and practice of new innovative regulatory tools
Design concept of new innovative regulatory tools
Break the dilemma of “death in one tube and chaos in one release” to improve the applicability of supervision. In the era of financial technology, financial services are more diverse, business boundaries are more blurred, and the risk situation is more severe. The effectiveness of financial supervision is facing new challenges. The traditional innovative supervision model has “failure” to a certain extent. Regulatory departments urgently need to encourage practitioners to take the initiative to innovate on the premise of protecting the legitimate rights and interests of financial consumers, and be able to detect and avoid innovation defects and hidden risks in a timely manner. The People’s Bank of China is creating a new type of innovative supervision tool, which is to deal with the relationship between security and innovation. In view of the fintech innovation situation in China, we have explored a financial technology that can not only maintain the bottom line of security, but also tolerate reasonable innovation and highly adapt to China’s national conditions. The road of supervision effectively solves the dilemma of “death in one pipe and chaos in one pipe” faced by innovation supervision, and regulates and guides the healthy and orderly development of financial technology.
Abandon the simple “one size fits all” model and enhance regulatory inclusiveness. From historical experience, proper supervision is the key to the effectiveness of financial supervision. Too little supervision can easily lead to a large number of fraudulent products flooding the market, thereby damaging the legitimate rights and interests of financial consumers; while too much supervision can easily lead to excessive compliance costs for practitioners, thereby reducing innovation vitality. Therefore, what kind of supervision intensity the new innovative supervision tool chooses is an important factor considered by the supervision department. At the beginning of the design, the People’s Bank adhered to the concept of inclusiveness, actively abandoned the “one size fits all” model, and actively explored new, more instructive, inspiring and inspiring new flexible regulatory methods, establishing strong and flexible, A flexible innovation trial and error tolerance mechanism , enhance the exchange of information and benign interaction between regulatory authorities, innovation entities, and the public, create a regulatory model that conforms to the internal development laws of new things, and create an inclusive financial technology innovation environment .
Introduce a “multiple linkage” public supervision mechanism to improve the effectiveness of supervision . China’s financial institutions are numerous and service innovations are on the rise. The traditional “government supervision + institutional autonomy” model is facing greater challenges. Introducing more external forces to participate in supervision is an effective means of optimizing innovative supervision models. The general public is the ultimate service target of financial products, and they have a say in the safety and convenience of innovative applications. To this end, the new innovative regulatory tools have introduced a public supervision mechanism to give full play to the role of different social subjects, so that financial consumers can have a deeper understanding of the functional essence, potential risks and compensation measures of innovative products, and better safeguard their own legitimate rights and interests; let the news media Play the role of social “radar” , supervise the safety, compliance and legality of innovative products; let third-party professional forces participate in pre-checks, comprehensively evaluate the reliability and effectiveness of safety protection measures; let industry organizations Strengthen the role of self-discipline and restraint, and better support the operation of new regulatory tools. These multi-linkage public supervision mechanisms help to build a coordinated and co-governance risk prevention and control governance system and enhance the effectiveness of innovation supervision.
Set a “rigid threshold” for innovative applications, emphasizing regulatory prudence. Financial technology development cannot follow the old path of Internet finance. It must pay attention to both flexible supervision and prudential supervision. To a certain extent, technology-driven financial innovation is an activity to explore the unknown field. Facing uncertain factors, risks and variables go hand in hand. Once the risk is ignored, it is likely to make a big mistake. The lessons of Internet finance in the past few years have shown profoundly that blindly deified information technology can not only promote the development of financial services innovation, but will make the financial markets mixed and financial products uneven, which will bring great challenges to financial stability. To this end, new innovative regulatory tools emphasize prudential supervision and strive to set a rigid threshold. From a financial perspective, adhere to the essence of financial technology is finance, strictly implement the principle of financial license operation, and strictly prevent illegal financial activities such as illegal fund-raising and financial fraud under the banner of “fintech”. From a scientific and technological point of view, a clear risk bottom line and safety standards, and a risk control system for dynamic risk monitoring, perception, and efficient disposal can ensure that truly valuable new scientific and technological achievements are fully tested and iteratively improved, and ultimately inject technological power into financial innovation.
Research and practice of new innovative regulatory tools
Based on the above design concepts, the People ’s Bank of China bases on the fintech innovation in China, draws on the experience of international financial supervision, adheres to the combination of theory and practice, deeply studies the implementation path of new innovative supervision tools, and actively organizes the development Test verification work.
Pilot exploration. Since 2019, the People ’s Bank of China, together with the Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Ministry of Human Resources and Social Security, and the Health and Health Commission, have been active in 10 provinces and cities including Beijing, Shanghai, Zhejiang, and Guangdong Organize pilot projects for financial technology applications. The pilot did not simply apply traditional risk prevention and control methods, but formulated emergency and exit mechanisms in advance, used risk provision funds, insurance plans and other compensation measures, and established a multi-level and three-dimensional comprehensive risk control system. To create a flexible and efficient trial and error tolerance mechanism. On this basis, the pilot experience and beneficial practices of comprehensive risk compensation, dynamic operation monitoring, safety assessment and certification, and cross-departmental collaboration have been refined to form the prototype of new innovative regulatory tools.
Theoretical research. Based on the preliminary exploration, a theoretical analysis model based on dynamic game is established, and an innovation supervision evaluation index system is designed according to the “Basel Agreement” and other frameworks, to improve the innovation trial and error tolerance and risk monitoring mechanism, and polish it in line with China National conditions, relatively mature financial technology innovation supervision tools. From the theoretical research and pilot exploration, innovative regulatory tools are not only conducive to financial regulatory authorities to better grasp the essence of innovation, risk characteristics and preventive measures, speed up the introduction of targeted regulatory rules, and improve regulatory effectiveness; but also help innovative entities to control risks In the real market, it is better to accept policy guidance, listen to the opinions and suggestions of the people, and comprehensively enhance the ability to maintain integrity and innovation.
Practice test. In December 2019, the People ’s Bank of China launched a financial technology innovation supervision tool in Beijing, and the first batch of innovative applications has been tested. These projects focus on the application of artificial intelligence, Internet of Things, big data, blockchain and other technologies in the financial field, covering application scenarios such as digital finance, supply chain finance and inclusive finance. Both licensed financial institutions apply directly and technology companies cooperate. participate. The response from all walks of life in the community is good. Many authoritative media believe that this move will help alleviate the difficulties of financing for small and micro private enterprises and the “last mile” of inclusive finance, and create a healthy and orderly environment for the development of financial technology innovation. A key step has been taken in building a financial technology regulatory system.
New innovative regulatory toolsFurther exploration of Supporting technology companies to apply for testing directly
Pilot exploration. Since 2019, the People ’s Bank of China, together with the Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Ministry of Human Resources and Social Security, and the Health and Health Commission, have been active in 10 provinces and cities including Beijing, Shanghai, Zhejiang, and Guangdong Organize pilot projects for financial technology applications. The pilot did not simply apply traditional risk prevention and control methods, but formulated emergency and exit mechanisms in advance, used risk provision funds, insurance plans and other compensation measures, and established a multi-level and three-dimensional comprehensive risk control system. To create a flexible and efficient trial and error tolerance mechanism. On this basis, the pilot experience and beneficial practices of comprehensive risk compensation, dynamic operation monitoring, safety assessment and certification, and cross-departmental collaboration have been refined to form the prototype of new innovative regulatory tools.
Theoretical research. Based on the preliminary exploration, a theoretical analysis model based on dynamic game is established, and an innovation supervision evaluation index system is designed according to the “Basel Agreement” and other frameworks, to improve the innovation trial and error tolerance and risk monitoring mechanism, and polish it in line with China National conditions, relatively mature financial technology innovation supervision tools. From the theoretical research and pilot exploration, innovative regulatory tools are not only conducive to financial regulatory authorities to better grasp the essence of innovation, risk characteristics and preventive measures, speed up the introduction of targeted regulatory rules, and improve regulatory effectiveness; but also help innovative entities to control risks In the real market, it is better to accept policy guidance, listen to the opinions and suggestions of the people, and comprehensively enhance the ability to maintain integrity and innovation.
Practice test. In December 2019, the People ’s Bank of China launched a financial technology innovation supervision tool in Beijing, and the first batch of innovative applications has been tested. These projects focus on the application of artificial intelligence, Internet of Things, big data, blockchain and other technologies in the financial field, covering application scenarios such as digital finance, supply chain finance and inclusive finance. Both licensed financial institutions apply directly and technology companies cooperate. participate. The response from all walks of life in the community is good. Many authoritative media believe that this move will help alleviate the difficulties of financing for small and micro private enterprises and the “last mile” of inclusive finance, and create a healthy and orderly environment for the development of financial technology innovation. A key step has been taken in building a financial technology regulatory system.
New innovative regulatory toolsFurther exploration of Supporting technology companies to apply for testing directly
Licensed operation is the basic condition for financial institutions to apply for testing. Correspondingly, the corresponding thresholds for technology companies to apply directly for testing also need to be set. As an important participant in fintech innovation, technology companies are mainly engaged in the R & D, design, and output of financial technology-related business systems, computing power storage, and algorithm models. Therefore, should clarify the basic and universal requirements of technology products in information protection, transaction security, business continuity, etc., and make them as the threshold for technology companies to directly apply for testing.
In the early stage, the People ’s Bank of China issued a number of financial services such as cloud computing, personal financial information protection, blockchain security, financial APP, application programming interface, etc. Scientific and technological standards have laid a good foundation for work. In the follow-up, we will further optimize the innovation supervision process and mechanism, clarify the standards of technology product maturity, adaptability, security, stability, etc., pass the national promotion certification to ensure the safety gate, and ensure that it is fully tested and iteratively optimized in real financial scenarios. Technology companies can polish technology products that meet the common needs of the industry and meet regulatory requirements. Technology companies can directly apply for testing under the premise of meeting the threshold requirements, and the financial service innovations and financial application scenarios involved must be provided by licensed financial institutions. Technology companies can either jointly declare with financial institutions or choose to apply for cooperative financial institutions in combination with application scenarios after filing alone.
Optimized testing risk prevention and control mechanism
Optimized testing risk prevention and control mechanism
Financial technology innovation or the use of a new generation of information technology, or the adoption of new business models, the risk is dynamic Yes, with a high degree of suddenness and unpredictability. In order to better control innovation risks and find out the running status of financial service testing, the PBC will further optimize the testing risk prevention and control mechanism.
Using regulatory technology to accelerate the establishment of innovation risk monitoring platforms and procedures, using regulatory probes, external perception, information sharing and reporting to collect and analyze innovation risk in real time, Realize early detection and comprehensive evaluation of potential risks. Establish and improve a comprehensive risk prevention and control mechanism for financial technology innovation, and promote differentiated risk early warning and efficient emergency response.
Guide the testing organization to fulfill the main responsibility of risk prevention and control, with the help of third-party professional support capabilities, strictly achieve early detection of problems, early warning of risks, and early remediation of vulnerabilities. Take timely comprehensive risk compensation measures for risk vulnerabilities that are difficult to remedy in the short term; innovative applications for major safety issues, Timely block and withdraw from the test; for the loss, the test institution must compensate through risk provision funds, insurance plans, etc., and effectively protect the legitimate rights and interests of consumers.
Actively use innovative regulatory tools to promote the digital transformation of the financial industry
Actively use innovative regulatory tools to promote the digital transformation of the financial industry
Since the outbreak of the New Coronary Pneumonia, there has been a strong demand for contactless financial services, not only young More favored online financial services such as mobile banking and mobile payment. People with disabilities, the elderly, and sick people also urgently need to get safe and convenient financial services “without going out or meeting”, which puts more emphasis on the digital transformation of financial institutions. High demands. It should be emphasized that contactless financial services do not mean that customers do not have any interaction with financial institutions, but instead transform “face-to-face” into “screen-to-screen”, “key-to-key” and “wire” based on communication channels such as network and telephone. Connect. ” In fact, financial institutions rely on big data, artificial intelligence, blockchain and other modern technologies to provide contactless financial services, which deepens the interaction with customers. In the long run, they have expanded customer base, optimized service models, and expanded development space. Of great significance.
Next, the People ’s Bank of China will give full play to the leading and incubating role of innovative regulatory tools, provide a safe and convenient testing environment for innovative applications of financial technology, and encourage financial institutions to dig deeper into technology Innovative potential, increase data integration, and on the premise of guaranteeing the security of funds and information, based on online channels, remote services and other means to unblock the financial “green channel”, provide more refined, humanized, and The temperature of financial services will promote the digital transformation of the financial industry faster and better.
Accelerate the construction of a fintech regulatory framework based on innovative regulatory tools
Accelerate the construction of a fintech regulatory framework based on innovative regulatory tools
Research and practice at home and abroad show that fintech regulation is a complex system engineering, An effective, advanced, reliable, and flexible regulatory system needs to be governed. In the next step, the People’s Bank of China will effectively fulfill the responsibilities of the Office of the Financial Stability Development Committee of the State Council, work with relevant regulatory authorities to coordinate and coordinate, strengthen the top-level design and overall layout of supervision, and jointly build a multi-level and systematic financial technology supervision framework.
Based on innovative regulatory tools. Inclusive and prudent innovative regulatory tools can better adapt to the complex and volatile risks of fintech and the ever-changing products, help to enhance the effectiveness of financial regulation, prevent and resolve innovation risks, and have a fundamental role in the regulatory framework.
Based on innovative regulatory tools. Inclusive and prudent innovative regulatory tools can better adapt to the complex and volatile risks of fintech and the ever-changing products, help to enhance the effectiveness of financial regulation, prevent and resolve innovation risks, and have a fundamental role in the regulatory framework.
takes the supervision rules as the core. The key to financial technology supervision is to issue corresponding supervision rules in a timely manner, so that innovation can be followed by rules and regulations. Traditional regulatory models often require a period of research and practice to introduce regulatory rules, making it difficult to keep up with the pace of innovation. The People’s Bank of China will better grasp the service model, business nature, and risk mechanism of fintech innovation through innovative regulatory tools, introduce regulatory rules more quickly, and alleviate regulatory gaps and regulatory arbitrage caused by lagging rules.
Use digital supervision as a means. The promulgation of regulatory rules is not the purpose, the important thing is to implement the implementation well. In the era of financial technology, relying solely on window-based guidance, off-site inspections, and other empirical, manual, and decentralized traditional supervision methods is far from enough, and it is necessary to strengthen digital supervision capacity building. The People’s Bank of China will give full play to the important role of production factors such as data and technology, build a Digital Regulatory Reporting Platform (DRR), use natural language processing, knowledge graphs, deep learning and other artificial intelligence methods to realize the formalization, digitization and programming of regulatory rules, strengthen The depth and breadth of regulatory penetration accelerate the data blessing and technological arming of financial technology supervision. (The author Fan Yifei is the deputy governor of the People’s Bank of China, the original title is “Fan Yifei: Exploration and Practice of China’s Fintech Innovation Supervision Tools”)
Use digital supervision as a means. The promulgation of regulatory rules is not the purpose, the important thing is to implement the implementation well. In the era of financial technology, relying solely on window-based guidance, off-site inspections, and other empirical, manual, and decentralized traditional supervision methods is far from enough, and it is necessary to strengthen digital supervision capacity building. The People’s Bank of China will give full play to the important role of production factors such as data and technology, build a Digital Regulatory Reporting Platform (DRR), use natural language processing, knowledge graphs, deep learning and other artificial intelligence methods to realize the formalization, digitization and programming of regulatory rules, strengthen The depth and breadth of regulatory penetration accelerate the data blessing and technological arming of financial technology supervision. (The author Fan Yifei is the deputy governor of the People’s Bank of China, the original title is “Fan Yifei: Exploration and Practice of China’s Fintech Innovation Supervision Tools”)