(Yicai Global) Sept. 18 -- With the introduction of fintech, regulators have no choice but to switch from institutional to functional supervision, Zhu Min, head of Tsinghua University's National Institute of Financial Research, said in a speech at the China Fintech Conference yesterday.

Zhu was also deputy managing director of the International Monetary Fund and once served as the deputy governor of the People's Bank of China, the country's central bank.

Regulators must also give up focusing on single, isolated areas and create cross-border policies, as financial technologies all have cross-border functionality, he added.

Fintech's biggest impact is in law and supervision. Regulation must be real-time to keep up with the rapid market changes, Zhu said, adding that it will be difficult to control overall volatility and risks.

In the future, there will be fierce, dynamic competition among fintech companies and a constantly changing market, as the sector is completely technology-led and evolves quickly, he continued. There will also be rivalry between fintech platforms and traditional financial firms, and it remains unclear which will come out on top.

Regulation plays a key role in determining an industry's development direction. The path regulation heads toward will have significant implications for the formation and direction of the market in future, Zhu said.

Today's supervision is extremely sensitive and important to the future, as competition and regulation will determine the landscape of the financial ecosystem, he forecast.

There is a need for a legal framework to protect the legal status of individuals and the ownership, transparency, confidentiality, public use and compilation of data, and Zhu believes that regulation and law will change greatly in the future financial ecosystem.

No matter what happens, fintech is set to impact and reshape the future of finance, Zhu added.