PBOC Is Working to Build Fintech Regulatory Sandbox, Official Says
/ SOURCE : yicai
PBOC Is Working to Build Fintech Regulatory Sandbox, Official Says

(Yicai Global) Oct. 28 -- The People's Bank of China is taking steps to develop an application framework for technology regulation, establish and improve basic rules for fintech supervision, and create a Chinese version of the so-called regulatory sandbox, according to an official at the central bank.

Pioneered by the UK's Financial Conduct Authority, the regulatory sandbox encourages fintech startups to take bold action on innovative products, services, business models and delivery mechanisms by providing a mini version of the real market and a looser regulatory environment.

Blockchain, Big Data, artificial intelligence and other technologies have rapidly penetrated areas of the economy and society, resulting in a booming digital economy, with data an important production factor and digital transformation a major driving force, Li Wei, head of the PBOC's technology department, said at a forum in Shanghai today.

In this context, finance and technology have once again embraced each other, creating new service models that lead to higher service efficiency and lower operational risks, and affecting the organization mechanism and system management of traditional financial institutions, Li said. Accelerating digital transformation has become an inevitable choice for transforming the development mode, cultivating growth momentum, and adapting to the general trend of financial ecological transformation in the future.

Li said that promoting digital transformation is of great significance and is the key to determining the core competitiveness of commercial banks in the future, but there are still some problems and challenges in the development process of China's commercial banks.

The problems include the dearth of sci-tech talent and their limited number at banks. Such staff account for less than 5 percent of employees at most commercial lenders, according to a recent survey. In terms of tech application, more investment is needed in science and technology research and development, and more application scenarios have to be explored. The lack of uniform standards and departmental authority make it impossible to use data resources.

Li suggested that commercial banks strengthen cooperation with technology companies, using external resources to empower their technology R&D, risk management and precision marketing. They should also integrate their own technical resources and develop new products and markets by setting up fintech subsidiaries.

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Keywords: China’s Central Bank , Regulatory Sandbox