The development of fintech and the application of big data have promoted the transformation of the entire financial industry into a digital direction, and increased the difficulty of risk prevention and control, which requires multi-faceted responses, several regulators and experts said at the 2020 Financial Street Forum annual meeting on Oct 21.
In addition, we need to strengthen the supervision of the application of technology and use technological means to regulate technology.

Big data is the foundation of financial services

From the perspective of the relationship between finance and science and technology, Wu Zhaohui, president of Zhejiang University, said that science and technology is changing from external support to internal transformation force, and has become an indispensable core element of financial development.The innovative application of disruptive technologies such as big data, artificial intelligence and cloud computing in finance is profoundly influencing the way financial services are provided.

"The market generally summarizes fintech as' ABCDE ': A refers to artificial intelligence, B refers to big data, C refers to cloud computing, cloud storage, D refers to distributed ledger, block chain, E is e-commerce."According to Yi Gang, governor of the People's Bank of China, big data is the most important part of ABCDE.
It is the fulcrum of all technology and the foundation of financial services.
Artificial intelligence, cloud storage, distributed ledger and e-commerce all depend on big data.

CAI Esheng, vice chairman of the Executive Council of China Finance 40 Forum and former Vice chairman of China Banking Regulatory Commission, said that financial intelligence is an inevitable trend of the innovation and development of fintech. Financial intelligence with artificial intelligence as the core represents higher production efficiency and broader content of production factors, and is the advanced form and inevitable direction of fintech development.At present, around artificial intelligence, China has put a number of financial technology products into the pilot, I believe that China can occupy a place at the top of financial intelligence in the future.

Data security protection is urgent

According to Yi, the development of fintech and the application of big data have promoted the transformation of the entire financial industry to a digital direction, but also caused problems such as trade secrets, personal privacy protection and data divide.

In the opinion of Fan Yifei, Deputy Governor of the People's Bank of China, the deep integration of finance and technology not only innovates financial products, reengineering business processes and improves service quality and efficiency, but also changes the financial operation mechanism and increases the difficulty of risk prevention and control. Financial innovation and development face new situations and new challenges.For example, data security cannot be delayed.More and more data transfer from internal private network to the Internet, a large amount of sensitive information directly exposed to the open network environment.At the same time, some consumers and financial institutions lack the awareness of data protection, and do not have a good understanding of the links and hazards of data leakage, while the means of data theft by criminals are constantly updated, from face-to-face decoy to remote network attacks, from Trojan virus to "SMS sniffing", personal privacy leakage and other security incidents frequently occur, and even endanger the safety of people's lives and property.

Cross-business risks cannot be ignored either.Fan Yifei said that in the context of fintech, mixed financial operations are more common and multiple businesses are interwoven, resulting in complex risks, difficult to identify and more spillover.From the perspective of concealment, some fintech innovative products increase the difficulty of financial regulation definition and identification through cosmetic packaging, which increases the concealment of risks.Cross-business risks put forward higher requirements for the risk management and sound operation of financial institutions, and brought severe challenges to the penetrating supervision of financial management departments to prevent and resolve financial risks.

When it comes to the impact of fintech on the financial system, CAI said three aspects need to be paid attention to: the impact of technological development, the monopoly of technology giants and the privacy of data applications.He believes that different from the process control of traditional financial industry, fintech can automatically identify customer needs and make efficient responses, efficiently collect and analyze customer feedback, and update products again.Under the onslaught of fast-changing fintech products, new financial business models may run the risk of exceeding market expectations.

We will improve regulatory science and technology

According to Yi Gang, issues such as trade secrets, privacy protection and data gap should be addressed in many ways.First, establish a clear legal framework and create a level playing field.
What should be transparent must be transparent, and what should be protected must be protected to prevent abuse of privacy and trade secrets.Second, we will improve the financial regulatory system.Third, we need to strengthen international cooperation.Fourth, traditional and effective financial transaction channels and services should be maintained.

Fan Yi Fei said, to consolidate the strong base, play the multiplier role of data elements.For example, optimize data governance.Establish and improve the data governance mechanism, strengthen the construction and management of data standards, data models and asset catalogs, clarify the data ownership relationship, do a good job in the scientific definition of data ownership, use right, management right and profit right, create a "common language" of financial data, and effectively improve the data quality and management level.At the same time, strengthen data protection.Follow the principle of "user authorization, minimum sufficient, special purpose, full protection", fully assess potential risks, strengthen the security management of data in the whole life cycle, integrate national security, public rights and interests, personal privacy and enterprise legitimate interests and other factors to make data classification and classification, achieve refined data management and differentiated protection, and secure the security threshold.Strictly guard against data leakage, tampering and abuse.

CAI Esheng said that the development of fintech has brought challenges to regulation. Fintech is reconstructing the logic between financial regulation and financial business, making many emerging business forms free from the traditional financial regulation system.Regulators lack sufficient technical means to conduct dynamic monitoring, real-time tracking and timely warning of fintech, which may lead to the lack of supervision and many problems.Strengthening the application practice of science and technology supervision is an important global issue. The development of science and technology has made it impossible for traditional supervision methods to achieve penetrating supervision. However, the financial supervision methods based on science and technology are becoming mature day by day.