Certainly, a unified global approach to regulating Financial Technology (FinTech) has its merits. In that light, China is willing to participate in international rule-making around the digitalisation of financial services to prevent anti-competitive behaviour and increase data protection for consumers, the country’s top central banker disclosed.
Moreover, Yi Gang, governor of the People’s Bank of China (PBOC), added that cooperation is needed to mitigate regulatory arbitrage between jurisdictions and to lower cross-border contagion from financial risks. He expressed this sentiment in a prerecorded speech for a recent conference organised by an international bank on regulating emerging technologies.
In the era of the digital economy, the integration between finance and technology is a global trend. As technology for good is an intrinsic requirement, how to enhance innovation capacity while preventing negative effects of FinTechs is a common challenge faced by us all.
– Yi Gang, Governor, People’s Bank of China
China knows how valuable technology is. However, it is also aware of the need to regulate and manage it. Yi’s speech comes as Beijing is curbing monopolistic behaviour in the country’s high-flying technology sector in the name of the common good and greater prosperity for every Chinese citizen.
Beijing has been calling for greater protection around personal data. Towards that end, it has been looking into China’s biggest technology firms with a hard stance. That includes its biggest FinTech companies.
The resulting scrutiny on technology in the past months has been sweeping. Its extent has been felt by just about every sector of society. Some of these measures are:
- Oversight on the use of algorithms
- Drive against online financial misinformation
- Limits on online gaming by children
Aware of how crucial Big Data is, China has placed an oversight on companies that hold the data of one million or more Chinese persons. Moreover, wanting to give top-quality learning input to its millions of schoolchildren, the country proceeded to limit private tutoring, upending the country’s Education Technology (EdTech) sector in the process.
Despite some hesitancy, the country’s fintech industry has flourished all these past months. Today, China’s economy is largely cashless, and it still has one of the highest penetration rates of fintech services among major economies. Experts estimate that rate has reached 87 per cent.
Indeed, global cooperation on digital finance regulation can be beneficial for the global economy. China can learn a thing or two from other major digital economies around the world while at the same time the Asian nation can also impart its learnings in the pursuit of digital transformation.
In addition, a global approach to FinTech can result in a more comprehensive digital banking for everyone on the planet as systems and standards can be agreed upon by everyone for the common good.
No doubt, China has made great strides in making the most of digital technology. It is looking to strike a balance between taking advantage of emerging technologies while at the same time ensuring that rules are being observed for the common good. For instance, that is the story of how Artificial Intelligence was regulated. On the other end of the spectrum, that is also the story of how digital assistive technologies contributed to the 2022 Beijing Winter Paralympic Games as reported on OpenGov Asia.