Following the successful conclusion of the first three-year plan for financial technology, in 2022, the People’s Bank of China officially issued the “Financial Technology Development Plan (2022-2025)”, setting goals and directions for the development of financial technology in the next four years. There is no doubt that 2022 will be a year of opportunities and challenges for the fintech industry.
On September 3, at the 2022 Service Trade Fair, KPMG China and the China Internet Finance Association Fintech Development and Research Committee jointly released the “2022 Chief Insight Report of Chinese Fintech Enterprises” (hereinafter referred to as the “Report”). The “Report” pointed out that finance is the core of modern economic and social development, and has the effect of affecting the whole body. Science and technology are the primary productive forces. Compliance and data security will become the core competitiveness of the fintech industry.
Industry expectations weaken and market competition further intensifies
The “Report” pointed out that my country’s economy is facing triple pressures, and the spread of the epidemic will have an impact on the economy. Faced with the downward pressure on the economy and the impact of the epidemic, the interviewed companies are still full of confidence in the future development of the industry.
Overall, the average future development confidence index of the financial technology industry is 82, which is the same as last year. In terms of sub-items, the proportion of respondents with a confidence index below 60 increased from 3% to 8%, the proportion of companies with a score of 60-79 increased from 32% to 40%, and the proportion of companies with a score of 80-100 increased from 3% to 8%. 65% dropped to 53%. From the increase in the proportion of respondents in the low group (below 60 points) and the decline in the proportion of respondents in the high group (80-100 points), it can be seen that although the industry confidence index generally remains at a high level, some companies are not optimistic about the development of the industry. The expectations of the market have weakened, and the pressure of market competition will further increase.
The “Daily Economic News” reporter noticed that compared with 2021, the number of respondents with a confidence index below 80 in 2022 will increase. “From the actual market situation, many companies have been affected by the general environment. Many of the interviewed companies are engaged in B-side business, that is, providing solutions to traditional financial institutions. The demand of these financial institutions themselves is also shrinking due to the impact of the environment. “Huang Aizhou, managing partner of KPMG China’s financial technology, told reporters that on the other hand, from the perspective of exit, the road to exit is becoming more and more difficult. Therefore, from these two aspects, the confidence index of enterprises has declined.
In addition, financial technology also shows that the overall digital transformation of the financial industry has been further deepened, and the pace of transformation of the securities and asset management industries has accelerated significantly; over 40% of enterprises have or plan to expand their businesses overseas, mainly in Southeast Asia and my country’s Hong Kong, Macao and Taiwan regions; financial institutions and Fintech enterprises are “obstructed” in cooperation, focusing on concerns about data security and privacy protection risks; PE/VC is still the largest investor in fintech, and investment by financial institutions and Internet companies continues to rise; corporate R&D investment and technology personnel reserves are “accumulating.” ”, the awareness of intellectual property rights has been significantly enhanced; the application of big data, AI, blockchain, and privacy computing has been deepened, and the comprehensive characteristics of technology empowerment are obvious; the awareness of industry standardization still needs to be further strengthened, and the substantive participation in international standards is insufficient; nearly 50% Enterprises have explored algorithm ethics, but 20% of enterprises have not yet carried out ethical governance work; the shortage of data governance talents is the most prominent, and it is difficult to find talents in model algorithms, digital operations, and architecture design.
Drilling technology, tree brand, etc. have become major trends in the industry
The “Report” also gives a judgment on the ten major trends in financial technology.
Specifically, market expansion, brand building, technology drilling, and strength enhancement will become the focus of the company’s future development strategy; whether it can balance data fusion applications and security protection; digital supply chain finance, green finance and ESG investment, and pension finance are the most popular Favored business blue ocean; the financial technology industry cluster is the “three pillars” of the Yangtze River Delta, the Pearl River Delta, and the Beijing-Tianjin-Hebei region; the continuous development of the regulatory sandbox and the development of regulatory technology are the key measures to balance innovation and risk; financial data governance focuses on deciphering data Insufficient integration and application capabilities and excessive collection of personal information; Fintech-enabled pension finance should focus on the development of digital products and equipment to adapt to aging; the key to integration and innovation of Fintech and green finance lies in data governance and infrastructure construction; strengthening system construction and organization Construction is the “two wheels of the car” for financial network security management; the prospect of Metaverse’s financial application is promising, but the actual layout of the enterprise is insufficient, and the atmosphere of conceptual speculation and speculation is a constraint.
Zhang Chudong, vice chairman of KPMG China and partner in charge of the financial industry, said that “drilling technology and building brand” has become the future development path identified by most companies. Technological innovation has penetrated into the entire chain of financial services, running through multiple scenarios in which financial services serve the real economy. As core technologies such as artificial intelligence, blockchain, cloud computing, and big data continue to empower the development of fintech, technologies such as the Internet of Things, AR/VR/MR, and digital twins will also provide new development space for financial businesses and promote industrial development. Combined with finance, supply chain finance, green finance and pension finance are expected to become the blue ocean fields for the future development of financial technology, with unlimited development space.
“Finance is the core of modern economic and social development, and it has the effect of affecting the whole body. Science and technology are the primary productive forces, and compliance and data security will become the core competitiveness.” The “Report” is an urgent prerequisite for the innovation and development of financial technology. The following six policy recommendations are proposed to extend and innovate in concepts, processes, and business through the Internet, big data and other technologies, so as to avoid risks for the development of the financial technology industry to the greatest extent. The “Report” suggests that it is necessary to create more fintech model projects and model institutions that conform to the direction of national policies, adhere to the orientation of benefiting the people and enterprises, and have real promotion value, and play their leading role and driving role in the overall transformation and upgrading.
In addition, the “Report” also pointed out that it is necessary to strengthen the norms of cooperation between financial institutions and fintech enterprises, and in accordance with the principles of “compliance with laws and regulations, equal rights and responsibilities, clear boundaries, and controllable risks”, differentiate the types of cooperation to strengthen financial institutions and fintech enterprises. Prudential supervision of cooperation, and strictly implement the requirements on cooperation access, investment ratio, business limit, qualification certification, and cooperation concentration.
Source of cover image: Photo Network-500434040