Apr. 9 (NBD) -- As technology infiltrates into the financial domain at an unprecedented speed, China's financial industry is taking on various types of businesses, and the fintech sector, as one of the new businesses, is progressing rapidly, commented Wu Xiaoqiu, vice president of Renmin University of China, at a news briefing at the Boao Forum for Asia on Sunday.
Fintech (financial technology) is the new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services.
Financial sector sees great changes
Wu said to NBD that the fintech industry boasts great development prospects. Although he spoke highly of the development of internet finance, yet he took a wait-and-see attitude towards blockchain.
According to Wu, he started to pay attention to blockchain three or four years ago and had discussions with researchers or writers of blockchain books, but he hadn't yet figured out clearly what the blockchain is. The reason, Wu further explained, lied in the fact some people were making blockchain obscure and mysterious.
Wu also acknowledged that China's financial sector, with the birth of new systems including blockchain and internet technology, is shedding off constraints and witnessing earth-shaking changes.
Wu attributed the financial innovation and reform in China to two forces: A) the market power to connect capital suppliers to demanders directly and cut out the intermediaries; B) the infiltration of technology in the financial sector.
The market power spurred the development of the financial and the capital market, which is regarded as the disintermediation in financing, whereas the power of technology enables the disintermediation in payment, Wu noted.
Regulations should facilitate financial innovation
Wu pointed out that the fast reform in China's financial sector also brings some puzzles to the related regulations and supervision. The supervision focus should be shifted from institutional risks to market risks, Wu advised.
According to the revamp plan by the State Council, China is to merge two watchdogs into the China Banking and Insurance Regulatory Commission, which together with the China Securities Regulatory Commission and the People's Bank Of China constitutes the country's financial regulatory mechanism.
Other than adjusting regulatory framework, the watchdogs should also sharpen up regulation focus, Wu added, saying that all the securitized assets should be taken under supervision. The core of the regulations is to prevent financial risks from spreading which could possiblly lead to financial crisis, Wu added.
Regulatory measures should be aimed to facilitate financial innovation in the country, as the financial sector can't advance without innovation, Wu noted.