Financial Regulation, Internet Banking and FinTech in China

Recently, the People’s Bank of China (PBOC), China Banking Regulatory Commission (CBRC), China Securities Regulatory Commission (CSRC) and China Insurance Regulatory Commission (CIRC), who are collectively known in China as the “Yi Hang San Hui” (one central bank, three commissions), have issued four major implementation plans around Internet finance. The plans aim at reducing risks in the internet finance industry.

Strengthening financial regulation for non-bank institutions is absolutely necessary in a country like China, in which applications such as WeChat, AliPay and other wallet-like environments are increasingly being used to make payments and transfer money, thus raising fears as for the survival of traditional banking institutions in favour of digital and online banking; as well as issues in privacy management, legitimacy of issuers and providers, credit quality, liquidity, solvency, etcetera.

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These applications operate by mining users’ behaviours and their transactions, and then aggregate and use big data to propose own and third-party providers services.

“The four main implementation plans are related to four main financial areas in the Chinese market: P2P Internet Lending, Equity Crowd Funding, Internet Insurance, and Non-Bank Payment Institutions. The task group also involves other parties such as Ministry of Industry and Information Technology (MIIT), Ministry of Public Security, and State Administration of Industry and Commerce, etc., so is one of the most all-encompassing and far-reaching regulations so far (see also Felix Yang, Kapron Asia).








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