Home » Yi Gang: Make up for the shortcomings of supervision and disconnect the improper connection between financial and commercial information_Platform

Yi Gang: Make up for the shortcomings of supervision and disconnect the improper connection between financial and commercial information_Platform

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Original title: Yi Gang: To make up for the shortcomings of supervision and break the improper connection between financial and commercial information

Securities Times reporter Wang Junhui

A few days ago, the Governor of the People’s Bank of China Yi Gang delivered a speech at the Bank for International Settlements (BIS) International Conference on Supervision of Large-scale Technology Companies, sharing China’s regulatory practices on large-scale technology companies.

Yi Gang said that under the impetus of technological progress, China’s financial technology has developed vigorously, which has reduced the cost of financial services and improved the efficiency of China’s financial services. It has also effectively assisted inclusive finance, reduced reliance on collateral, and is more satisfying. The financing needs of small and micro enterprises “small, frequent and urgent”. At the same time, the continuous development of financial technology has also brought new challenges to the Chinese regulatory authorities.

One is to engage in financial business without a license or beyond the scope. When conducting various services such as e-commerce, payment, and search, China’s top platform companies obtain massive amounts of information on users’ identities, accounts, transactions, consumption, and social interactions, and then identify and judge personal credit status. The cooperation of institutions in credit business is equivalent to the development of personal credit investigation without permission. The top platform companies provide financial services such as wealth management, credit, and insurance under the same platform, which magnifies the possibility of cross-product and cross-market contagion of financial risks.

Second, there are violations of the payment business. In the past, payment institutions under Chinese platform companies could connect to hundreds of commercial banks and open accounts, causing settlement finality issues and possibly even systemic risks. Some platform companies violated regulations to invest the deposits deposited by customers in various types of financial assets. Platform companies have also nested credit services such as “huabei” and “borrowing” in the payment link to mislead consumers.

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The third is to carry out unfair competition through monopoly status. Platform companies naturally have the attribute of “winner takes all”, which may trigger market monopoly and reduce innovation efficiency. Some domestic platform companies seize the market through cross-subsidies and other methods, and after gaining market dominance, they implement exclusive policies, such as excluding competitors from entering the platform and providing services. The QR code payment business only supports the relevant APP scan code payment within the technology group.

Fourth, it threatens personal privacy and information security. In order to obtain financial services from platform companies, Chinese consumers often need to provide them with personal information. Large-scale platform companies have excessive collection and even abuse of consumer information, which is not conducive to consumer information security and privacy protection.

The fifth is to challenge the business model and competitiveness of the traditional banking industry. On the one hand, Chinese commercial banks have enjoyed significant traditional competitive advantages in terms of service scenarios and channels, customer information, and funds. The rapid development of various innovative Internet financial products in recent years has caused challenges to this and has accelerated the diversion of bank deposits. It is not included in the corresponding supervision. On the other hand, China has about 4,000 small and medium-sized banks with limited resources. They can only rely on technology and platforms provided by large technology companies for customer maintenance, credit analysis, and risk control, which may weaken customer acquisition capabilities and product competitiveness.

Yi Gang said that in order to cope with the above-mentioned challenges, China has continued to make up for the “shortcomings” of the regulatory system and has successively introduced measures to promote the healthy and sustainable development of the platform economy. Relevant measures are embodied in the following three regulatory practices: First, as a franchise industry, finance must be licensed to operate. The second is to establish an appropriate firewall to avoid the spread of financial risks across departments and industries. The third is to disconnect the improper connection between financial information and commercial information to prevent the closed-loop effect of “data-network effect-financial business” from creating monopoly.

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In terms of payment business, since the end of last year, financial regulators have requested that payment instruments be disconnected from improper connections with other financial products on their platforms, so that the payment business can return to its roots. In the future, it will continue to strengthen the supervision of the payment field. In terms of prudential supervision, the supervision of financial holding companies will be well implemented, consolidated management will be implemented, related party transactions will be regulated, and prudential supervision will be strengthened. Financial services must be licensed to operate. In the next step, we will continue to improve the relevant systems and implement the licensed operation of financial services such as personal credit investigation. In strengthening anti-monopoly supervision and maintaining fair competition order, it will play a good role in the supervision of anti-monopoly authorities, curb monopolistic behavior that abuses its dominant position in the market, and actively respond to new types of monopoly issues such as algorithmic discrimination.Return to Sohu to see more


Editor:

Disclaimer: The opinions of this article only represent the author himself. Sohu is an information publishing platform. Sohu only provides information storage space services.

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