FinTech: More Heat On Chinese Fintechs From Guo Shuqing
Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, hinted at tougher regulations.
Chinese fintechs should hunker down to face a tougher regulatory environment. Speaking at the Singapore Fintech Festival, Guo said the authorities were concerned about the power wielded by China’s large fintech companies. He warned that “timely and targeted measures to prevent new systemic risks” were on the anvil. (CNBC)
Systemic risk concerns scupper ANT’s IPO
A huge $35 billion IPO from the Ant Group that was to be dual-listed in Hong Kong and Shanghai was pulled at the last minute in November due to regulatory changes and after a meeting between the Ant Group management and regulators.
The Chinese government later clarified that it halted Ant Group’s IPO to “better maintain the stability of the capital markets and to protect investors’ interests.”
The regulators rewrote the rules for online micro-lending and imposed stricter capital requirements, practically on the eve of the IPO. This, after it secured all necessary approvals.
The trigger for the sudden and extreme action may have been regulators’ ire with Jack Ma following his abrasive comments on the country’s regulatory environment at the Bund Summit in Shanghai in late October.
Rapid growth in fintech is now a concern
“Facing the rapid growth of fintech, we will adopt a positive and prudent approach,” Guo said in Singapore today. “We will encourage innovation while enhancing risk control, so as to address new problems and challenges.”
Last week, in an article in a newly released book from the central government explaining the country’s economic priorities and development plan for 2035, Guo wrote that the rapid, technology-fuelled growth in fintechs’ businesses had created new challenges for regulators.
He wrote that online loan companies had skirted rules under the guise of “financial innovation,” and lamented that “there are no regulations or risk supervision practices [for China] to learn from.”
Today, Guo expanded his rhetoric to cybersecurity and “fair market competition” in the Chinese fintech industry.
He also drew attention to the increasing trend of big techs operating cross-sector businesses such as financial and technological activities under one roof.
“It is necessary to closely follow this spillover…” Guo said.
Tough questions for fintechs
″(The) fintech industry leads to many new phenomena and problems. We might need to pay more attention to the following questions,” warned Guo.
“Has the big tech blocked newcomers? Have they collected data improperly? Have they refused to disclose information that should be made public? And, have they engaged in conduct misleading users and consumers?”
Related Story: Top Chinese Regulatory Watchdog Airs Fintech Concerns
Feature Image: Wikimedia Commons
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