Upgraded Supervision Facilitates Financial Technology

Some senior members of Chinas fi nancial supervision authority recently sent signals of an upgrading in the supervision of financial technology （fintech）. Major economies in the world tend to have similar attitudes toward the regulation of fi ntech as it develops rapidly. In China， strong supervision has become a keyword； in the European Union， information security in the fi ntech fi eld has attracted more attention； and in the United States， supervision of virtual currency is becoming increasingly strict.

Fintech is bringing challenges to the fi nancial sector. On the one hand， the application of information technology further connects different business forms inside the fi nancial sector as well as fi nance with other industries， which also facilitates risk infections. On the other hand， with the application of information technology， risks already existing in systems， technologies and platforms are spreading to the fi nancial sector and even sectors that are not yet covered by supervision.

In the face of risks and challenges brought about by fintech， we should not be put off by the fear of risks because the economy will be vigorous only when finance is vigorous enough and the economy will be stable only when fi nance is stable enough. Hence this requires a balance between fintech innovation and fi nancial safety.

Financial safety doesnt mean low-level safety that denies innovation， but rather high-level safety based on the achievements of fintech innovation. Through the application of cutting-edge technologies such as big data， cloud computing， the Internet of Things， biometric authentication and artificial intelligence， fintech innovation enriches the methods of safety protection and advances the development of the fi nancial market through the innovation of financial products， promoting the reorganization and integration of fi nancial resources. These will lay a solid foundation for maintaining fi nancial safety.

However， fintech innovation should never be achieved at the cost of ignoring fi nancial safety. It must be high-quality innovation aimed at ensuring fi nancial safety. Only when a supervising mechanism that aims to ensure fi nancial safety and covers the whole process of financial activities is established to alleviate damages of financial crises on the economy can fintech innovation advance steadily.

China has gained much valuable experience in regulating fi ntech innovation， and in the future the country needs to further improve its administration of fi ntech.

Through legislation， the top-down design of financial safety will be further strengthened， and the gap in laws in the new finance and pseudo-banking fields will be filled. In addition， to complement high-quality legislation， more enforceable industrial standards will be established so that financial institutions and supervision will have rules to abide by.

Regarding institutional improvement， besides the adjustments to the current structure that includes the Financial Stability and Development Committee of the State Council， the Peoples Bank of China， the China Banking and Insurance Regulatory Commission， the China Securities Regulatory Commission and local financial supervising bureaus， judicial institutional reform has begun， with the Shanghai Financial Court， the Beijing Internet Court and the Hangzhou Internet Court established. This means that in addition to administrative measures， judicial resources will be increasingly used in fi nancial supervision.

In the realm of social public governance， the protection of personal， property and information safety of financial consumers will be further stressed， which is part of prudential and behavior supervision. Moreover， there is the role of self-regulatory organizations in coordinated supervision. Compared to supervising authorities， selfregulatory organizations are closer to the market and have more resources， so they can contribute to the coordinated development of fintech innovation and financial safety.