The regulatory framework of the United States, on the one hand, eliminates some potential risks in the field of financial technology, on the other hand, greatly limits the development space of this industry. Obviously, in terms of risk control, we should learn from America. But we should also leave enough room for the development of internet finance. Objectively speaking, the development of Internet finance has actually met some needs of the real economy, which is particularly helpful to the development of inclusive finance. Similarly, if data control is too strict, big data analysis is impossible, but if commercial organizations are allowed to infringe on personal privacy, it will also lead to serious consequences.
Therefore, the core of the regulatory policy is to balance the relationship between innovation and stability, which not only ensures the rapid development of the Internet finance industry, but also does not cause significant financial and social risks, thus truly supporting the real economy.
Actively support steady financial innovation.
American regulation has done a good job in controlling the risks of financial technology, but it is obviously insufficient in supporting innovation. China's Internet finance industry has made greater progress, and a fundamental driving force is innovation. At the same time, the policies and systems of financial supervision departments in some areas have also been followed up in time (such as the field of third-party payment). In fact, it is a disguised marketization process. On the technical level, mobile terminals and big data are used to help solve the information asymmetry problem in financial transactions. No matter in the United States or China, most financial assets are still in the hands of traditional financial departments. Even the fastest-growing third-party payment in China accounted for only 4.4% of electronic payment transactions in banks in 20 16 years. Therefore, whether from the perspective of inclusive finance or from the perspective of supporting the real economy, Internet finance still has huge room for growth, and its development will promote the transformation of the industry as a whole into a technology-driven model. China's first-Mover advantage is hard-won, and it should be further developed.
Future supervision should strictly guard against risks and actively support financial innovation. When we establish a new regulatory framework for Internet finance, we should consider trying to strike a balance between the two. The first is to innovate supervision methods. The risk transmission of internet finance is wide and fast, and the traditional financial supervision methods, such as regular table delivery and on-site inspection, will be less effective. Therefore, it is necessary to consider the application of digital technology to financial supervision (RegTech). For example, consider directly connecting the regulatory information system with the database of Internet finance companies, so that the regulatory authorities can monitor the operating conditions in real time and analyze financial risks.
The second is to support financial innovation. In the past, a big background of Internet finance innovation in China was the lack of supervision, and this history cannot be repeated. Innovation can be carried out under the premise of controlling risks, such as "supervision sandbox". The regulatory authorities issue limited licenses to Internet finance companies to allow innovation. If successful, they can issue full licenses and promote them to the whole industry. If it is not successful, cancel the license. There are other practices such as "innovation center" and "innovation accelerator", and the principle is similar.
Recently, the FinancialConductAuthority (hereinafter referred to as FCA) has given an evaluation report on the "regulatory sandbox" mechanism that has been in operation for more than a year, and its conclusion shows that "regulatory sandbox" has brought better value to consumers and other financial service users by promoting beneficial competition in the market. Some indicators show that the "regulatory sandbox" has begun to have a positive impact on the price and quality of existing financial services. For example, many enterprises apply blockchain technology to cross-border payment, which brings significant benefits to consumers, such as shortening the collection time and lowering the exchange rate. There are also some institutions that test that consumers can use biometric technology to pay, log in and verify their identity, or apply facial recognition technology to risk assessment services in the field of investment consultants. FCA hopes and encourages beneficial innovations in the "regulatory sandbox" to go to the market and bring more benefits to consumers.
Either way, it requires close cooperation between the regulatory authorities and practitioners, because this is a new approach for both sides.
Internet financial institutions must set entry barriers.
Although the FinTech industry in the United States is not particularly large, the basic regulatory framework also guarantees that there will be no major risks. Financial security is an important part of economic security and national security, and it is very important to accurately judge potential risks and ensure financial security. Therefore, the financial industry is a strictly regulated sector in the economic system. This is true for indirect financing such as banks and insurance, as well as direct financing such as securities companies and fund companies. From this perspective, although China's regulatory policy has positioned the P2P online lending platform as an information intermediary, is the filing system sufficient? This is debatable. The further question to be considered is, under the premise of filing system, what kind of regulatory measures need to be formulated to prevent potential risks?
In the final analysis, no matter what kind of innovation Internet finance has made, its business is essentially finance, and finance needs strict supervision. More importantly, Internet finance has two outstanding characteristics. One is that the business is cross-regional and cross-industry, and the risk is transmitted quickly and widely. The other is that some participants in the internet finance industry have low ability to identify and bear risks. Therefore, it is particularly necessary to implement license management for Internet finance companies. Now let's take a look at some risk cases in the field of internet finance in the past few years. If there are basic qualification examination and daily supervision procedures, these risks may be avoided, at least the risks will not become so great.
There are some different voices in the industry and the regulatory authorities about the suggestion that Internet finance should be regulated by a license. The worry in the industry is that if the internet finance industry is managed in a traditional way, innovation will be impossible. Regulators worry that there are simply not enough resources to supervise every Internet finance company. Both of these concerns are justified. The government may need to substantially increase the establishment and funds of the regulatory authorities, and the regulatory authorities should also conditionally support financial innovation.
Since it is necessary to implement license management, it is necessary to issue licenses. The regulatory authorities strictly control the licenses of investment companies, which leads to the phenomenon that many companies that do smart investment are undocumented. This is not conducive to the development of the industry. Since it is necessary to manage, it is necessary to clarify the threshold and issue licenses to qualified companies. Companies that operate without a license should be resolutely banned, otherwise there will be endless troubles if the laws are not complied with. For some companies that have already issued licenses, but have not started their business well, they should collect their licenses in time. This problem is widespread in the field of third-party payment, and the license plate has become a tool for some companies to rent.
For some businesses that have not yet established a clear regulatory policy framework (such as equity crowdfunding and asset management), we should also speed up the formulation of rules, draw a clear compliance boundary for the Internet finance business that has been carried out in practice, and avoid business deviation and alienation.
Improve "transparency" and implement "investor suitability" supervision.
License management is only the first step to effectively supervise internet finance, and more importantly, it is necessary to strengthen supervision during and after the event. Except for banking and insurance, most businesses of internet finance have obvious direct financing characteristics, that is, participants make their own decisions and bear the consequences independently. There are two basic requirements for the supervision of direct financing. The first is to increase transparency. The biggest difficulty in financial transactions is information asymmetry, and it is difficult for a single market participant to fully understand all aspects of a financial transaction and a financial product. Regulatory policies need to help solve this problem. The regulatory policy requires the disclosure of financial statements and other information in the traditional financial industry to improve transparency. Similar measures should be taken for the supervision of Internet finance. In addition to similar statements and disclosures, because the process of Internet finance is often more complicated and secretive, we should consider implementing penetrating supervision to clearly show the capital flow of asset management, third-party payment and insurance to ensure compliance and transparency.
The second is "investor suitability", which is mainly because not every financial product is suitable for every market participant. For example, it is very irresponsible for financial institutions to sell high-risk financial products to retirees with very low risk tolerance. One of the problems of "campus loan" that has been criticized recently is to issue "usury" to students who have no stable income in disguise, which is not essentially different from the "subprime loan" that prevailed in the United States before 2007, and later triggered a serious subprime loan crisis. Internet finance companies that are prone to serious financial and even social problems like this should be "punished" by the regulatory authorities, although we also admit that not all "usury" is unreasonable. Digital currency (ICO) business, which was in full swing some time ago, is another good example. Judging whether a financial transaction is reasonable or not depends not only on compliance, but also on the principle of "investor suitability" from the perspective of supervision.
The regulatory policies of Internet finance should be unified and coordinated.
Internet finance is basically mixed supervision, which does not match the policy framework of separate supervision currently implemented in China. In some areas, such as P2P online lending platform, the dual supervision system of CBRC and local financial offices (local financial supervision bureaus) is not only the requirement for the central and local governments to perform their respective duties, but also the choice of the central regulatory authorities under resource constraints. But in fact, Internet finance companies are not the same as traditional small loan companies. Once the business platform is established, its business will not be limited to the licensed areas.
The coordination of Internet financial supervision policies should consider three aspects. First, set up a coordination mechanism for Internet financial supervision within the framework of the State Council Financial Stability and Development Committee, at least to ensure that the "one line, three meetings" and local financial supervision bureaus act in concert and cooperate with each other. The second is to formulate unified regulatory standards and policies. Regardless of whether the main body of regulatory policy implementation is "one line, three meetings" or local financial supervision bureaus, the standards should be unified nationwide. Otherwise, it will easily lead to the depression of regulatory policies and encourage regulatory arbitrage, and the consequences of any financial risk will still be national. Third, the practice of issuing licenses independently by American States should not be repeated. It is feasible for traditional financial institutions to issue licenses in various provinces and cities, but it is very unreasonable for Internet financial institutions. Therefore, once a license is issued, it should be national unless some special geographical restrictions are set.
Establish a rich, complete and market-oriented credit information system as soon as possible.
As mentioned above, in the United States, the three major credit reporting agencies and FICO and other credit reporting systems have played a large-scale role in acquiring customers, comprehensive data and evaluation standards in the development of FinTech. The credit information system is a public infrastructure and should be open to all institutions engaged in financial business (of course, under the premise of personal authorization). The delegation believes that compared with the United States, China's credit information system has two other functions.
First, decide how to get customers. While we criticize the slow and expensive direct mail system in the United States for pushing up the cost of customer acquisition, it is worth noting that the development of the express delivery industry has basically invalidated the traditional delivery system that relies on postal codes, and the main means of customer acquisition in the digital age is not entirely public products. It is easy for large companies to obtain mobile phone numbers by relying on their huge other services and established scenarios, while it is difficult for start-ups to obtain them in large quantities through formal channels, let alone basic credit information. The cost of indiscriminate mass sending and purchasing data black products is not necessarily lower than FICO plus direct mail.
Second, the support of product standardization. The development of FinTech in the United States is worthy of China's envy. Its products are highly standardized. Compared with thousands of credit products on hundreds of domestic platforms, standardized products have strong advantages in attracting institutional investment, protecting the interests of lenders and facilitating supervision. The underdevelopment of traditional finance makes it difficult for China to learn from the American way and complete product standardization in a short time. If we establish a rich credit information system based on big data and realize the standardization of big data, it will undoubtedly have a strong supporting role for further asset standardization.
Credit information sharing platform is often established by member institutions, which breaks the "information island" between institutions. The most striking feature of American credit reporting is that the three credit reporting agencies and FICO are private listed companies, and they have built the most developed credit reporting system in the world through marketization.
Combined with China's national conditions, on the one hand, we should consider changing the current situation that P2P platform cannot access the central bank's credit information system, and promote qualified institutions to access the credit information system. On the other hand, we can consider taking the lead or imitating American private enterprises through trade associations, and combining the advantages of government and marketization to promote the effective integration and legal use of credit information. In addition, for the credit data accumulated by commercial institutions, it may be necessary to treat public goods and quasi-public goods separately.
Strike a balance between protecting personal privacy and using big data analysis.
The protection of personal privacy and the pursuit of fairness in loans in the United States largely limit the role that big data analysis can play. The reality in China is that the privacy and personal data protection system is not perfect, theft and fraud are serious, and there are frequent industrial chaos in which commercial organizations abuse personal and corporate data.
Under the current situation of industry development, it is necessary to clarify the principle of user-centered data collection and use as soon as possible and improve the data use and supervision mechanism. American companies use social data cautiously and do not use private data. On the one hand, strict supervision comes first, on the other hand, the credit information system provides available basic data. The best way to combat the black market of data is to formalize the rules of data collection, management, authorization and use.
At the same time, we should avoid learning some outdated laws and regulations. In the digital age, the rules that conform to the development of the times will be truly observed, and forcing dogma will only increase the obstacles to development.
We should establish a user-centered principle and use technical means to run this principle through the whole life cycle of data use. Once individuals need financial services, they can open their personal information to financial institutions. Under the premise of protecting users' privacy, organizations can use big data analysis to judge the credit of potential customers.
P2P has improved the service of online lending platform as an information intermediary.
The delegation found that even in the United States, P2P(marketpalce) online lending platform is unstable as a pure information intermediary. The objective fact is that any investor (including individuals and institutions) who invests in online lending platforms must consider the credit of both products and platforms. Moreover, in most cases, it is impossible for investors to identify scattered and small investments one by one, and finally they have to make investment decisions mainly based on platform credit. China's credit culture is still underdeveloped, so it will be more difficult to implement a pure intermediary platform.
Technically speaking, the small-scale decentralization of P2P lending design ideas can only disperse the individual risks among different borrowers in the platform, but the financial risks themselves cannot be eliminated through small-scale decentralization in the platform. Therefore, the regulatory policy positions the online lending platform as an information intermediary, emphasizing that it cannot be a fund pool, and there is no maturity mismatch, requiring fund custody. These arrangements can reduce the risk of bank runs. However, from the lessons of P2P development in the United States, we can see that in the case of loan risk outbreak, concerns about the platform may lead to the subsequent depletion of funds and the shrinking of the platform. The development of P2P in the United States is worth learning. One way is to gradually move closer to the banking model and develop a stable source of funds. The other is to turn more to MarketplaceLending, that is, to absorb the funds of institutional investors, or to the mode of online small loan companies, and to raise funds in the market through ABS, bonds and other products.
Give full play to the role of trade associations.
In China, Internet finance industry associations can play a role in at least three aspects.
First of all, trade associations are the link between regulators and practitioners, which is conducive to information communication between them. Because the "Three Meetings" themselves are difficult to get through, industry associations can effectively transmit information and feedback effects between Internet finance companies and regulatory agencies.
Secondly, industry associations can make the implementation of regulatory policies smoother. Trade associations play a buffering role in policy formulation and implementation, and play an important role in the smooth transition of the industry.
Finally, trade associations can become a sandbox for regulatory experiments to some extent. The impact of regulatory rules on the industry is unpredictable, and the practice reflection of industry associations in a small scope can optimize relevant policies. For example, the current P2P information disclosure guidelines issued by CBRC fully absorb and draw lessons from the self-discipline rules of P2P information disclosure issued by China Internet Finance Association.