China’s central bank has turned its attention to fintech by setting up its own committee. The People’s Bank of China announced the news on Monday.
The Financial Times reported on the bank’s official statement. In the statement, the bank said it is going to use the fintech committee “with the purpose of strengthening fintech work in research, planning and comprehensive coordination”. The PBoC also said it would be working with businesses, academics and researchers in order to push fintech in China.
Harnessing the power of fintech
The Chinese central bank is looking to make the most of fintech in the changing landscape. PBoC’s objective will be to ensure the sector is able to respond to the challenges that financial security and the banking sector are undergoing. Furthermore, the bank wants to have a positive role in harnessing the potential of these new technologies.
In the official statement, the bank said it believes the industry has “injected new vitality” which can help China move forward. The country’s whole economy is currently going through changes, as the economic growth is slowing down.
Fintech could play a crucial role in helping the country to respond to these challenges. There is also a global challenge, with national governments pushing forward an agenda that would attract more fintech innovation to their respective countries.
China currently invests the most amount of capital in fintech development. Accounting firm EY’s research estimated the country to have invested over £6.5 billion in fintech in 2016.
The new committee is likely to have a strong regulatory role. In the statement, the bank said the committee would be organising research into fintech development. Its areas of interest would be issues such as monetary policy, stability and payment clearance, as well as financial markets as a whole.
The fintech committee is also going to examine new technology and its uses in fintech. This means it will be focusing on understanding issues such as big data, artificial intelligence, and cloud computing. The aim, according to the bank, is to ensure the sector is able to protect and resolve problems that might be lurking around the corner.
China Morning Post quoted a senior researcher at Bank of Communications in Shanghai. Li Ying told the newspaper, ”The new committee signals a strengthened regulatory stance to caution against risks amid the rise of the fintech sector”. According to Ying, governments will need to play a more central role in setting up rules and regulations for the sector in order to limit risks.
It is likely the committee will also be focusing on pushing China’s fintech agenda during the Belt and Road Initiative. The massive project is currently underway and it is aimed at boosting the country’s economy.