BEFORE YOU GO...
Check how Shufti Pro can verify your customers within secondsRequest Demo
China’s four years regime to clear all risks from the financial system have been extended to the financial technology sector. The regulators are working towards the set of rules for the fintech industry.
The financial watchdogs have made it their utmost priority to eliminate the reckless push of the finance sector and technology firms. This is due to the negligence that fueled the growth of the companies that became involved in a corruption scandal.
The financial watchdogs have guaranteed that more than 7,000 of the country’s fintech firms will be revamped. The regulators plan on keeping a check on every digital form of financial activity including the payment to credit scoring, partnerships, and wealth management. China’s leader plans on cleaning the risks of the $53 trillion financial industry. They will be tackling loans, wealth management products and fraud.
“Everything points to a toughening regulatory stance, which will surely bring more curbs down the road. Chinese regulators wouldn’t be comfortable with any financial activities staying outside their purview,” said Zhang Xiaoxi, a Beijing-based analyst at Gavekal Dragonomics.
China’s Central Bank has also laid out a warning that any organization with a 50% market in the digital payments can face antitrust probes. Many start-up companies in China are using technology for more affordable and adequate financial services. These financial services include money transfer to loans. Due to the rising threat of financial crimes, the regulators have announced that fintech needs regulations just like banks.
Deputy Governor Pan Gongsheng said in an op-ed in the Financial Times on Wednesday. “Fintech has not changed the nature of finance as a risky industry. China is trying to strike a balance between encouraging fintech development and preventing financial risks via prudent regulation. . . .The aim is to align business rules and standards with regulation to fend off arbitrage.”