![‘At a Crossroads: The Next Chapter for FinTech in China’](https://cdn.prod.website-files.com/5a3e922cf6b9a40001bc2d70/6094824bc588294d228585c0_0jBTR8Znn35SS7OUeHYknTl72eJkfbmt4t8yenImKBXClEVDjfPUC59YN0mws5Ae.jpg)
BIG IDEA | ‘As financial innovation has gained traction and the firms driving it have grown into sizeable players, the dynamic between innovators and regulators has begun to shift. Regulatory agencies have started to be more proactive in supervising the activities of technology firms after realizing that the size of many technology firms and FinTechs means they could threaten financial stability and peace in society if their innovation efforts and business practices were overly aggressive.’
Below is a small section from the excellent 28-page report, ‘At a Crossroads: The Next Chapter for FinTech in China’
The World Economic Forum & the Shanghai Advanced Institute of Finance have put out a short, 28-page report on Chinese fintech.
- As expected it glosses over some of the big issues the Chinese regulators are having with fintech companies, like Ant.
- But overall it gives a good perspective on the Chinese view.
'The industry was able to deliver these benefits because Chinese regulators took a “wait and see” attitude during the early stages of its development that allowed innovation outside the traditional regulatory perimeters to blossom, and then adjusted rulebooks only over time in a process of “regulatory catch-up”.’
‘As financial innovation has gained traction and the firms driving it have grown into sizeable players, the dynamic between innovators and regulators has begun to shift.’
- ‘Regulatory agencies have started to be more proactive in supervising the activities of technology firms after realizing that the size of many technology firms and FinTechs means they could threaten financial stability and peace in society if their innovation efforts and business practices were overly aggressive.
‘But the regulators and policymakers also understand that overly restrictive regulatory approaches could stifle future innovation and economic growth.’
- ‘What is needed is a thoughtful approach to innovation and regulation that enables the many benefits FinTechs can provide while controlling – and ideally eliminating – the potential risks.’
- ‘Regulators and the industry face a delicate balancing act and need to consider questions about the use and protection of data, potentially monopolistic practices, and alignment with global methodologies and standards.’