The Paper, News Reporter Ye Yinghe
In 2020, catalyzed by the development trend of financial technology and the epidemic, the Chinese version of the "regulatory sandbox" will accelerate and launch.
Since Beijing announced the first batch of pilot projects in January 2020, the pilot cities have expanded their capacity twice within eight months. In April, Shanghai, Chongqing, Shenzhen, Hebei Xiong’an New District, Hangzhou, Suzhou, Chengdu, and Guangzhou have also been expanded. Join the queue every month.
Up to now, all 9 cities have released a list of pilot projects, with a total of 70 innovative applications.
Among them, Beijing has released the third batch of pilot list on December 25, 2020. There are 22 items in total, which is the largest in number.
Among the remaining cities, Shanghai issued two batches of 13 items.
There are 6 items in Chengdu, 5 items in Chongqing, Hangzhou, Suzhou, Xiongan New District, and Guangzhou, and 4 items in Shenzhen.
Looking back at 2020, if the current 70 pilot projects are used as a guide, what is the future direction of the "regulatory sandbox"?
What lessons can be learned from the current pilot?
Nearly half involve "inclusive finance", with big data and artificial intelligence technologies being the most popular
Since the first batch of pilot projects in Beijing did not distinguish between financial services and technology products, the 64 product types from the second batch of pilot projects in Beijing, the Xiongan New District refers to the types of products other than financial services as technical products, which are also classified here as Technology Products.
Based on this calculation, there are 33 financial services and 31 technology products.
Most of the pilot areas have similar numbers of financial technology and technology products.
For example, in the second and third batches of pilot projects in Beijing, the ratio of financial services to technology products is 5: 6, Shanghai is 6: 7, Shenzhen is 2: 2, Chongqing is 3: 2, Hangzhou is 2: 3, and Xiong’an New District It is 3:2 and Chengdu is 3:3.
It is worth noting that there is only 1 financial service product in Suzhou, 4 technology products, and 5 financial service products in Guangzhou.
However, Zhang Xiaoyan, deputy dean of the Wudaokou School of Finance at Tsinghua University, previously told The Paper that whether it is a financial service product or a technology product, its final landing direction has not been separated from financial services.
Chen Wen, director of the Digital Economy Research Center of the School of Finance of Southwestern University of Finance and Economics, pointed out that the current application scenarios of the regulatory sandbox are mostly supply chain finance projects, aimed at inclusive customer groups such as small and micro businesses.
According to incomplete statistics from The Paper, 34 of the 70 pilot projects involve "inclusive finance", "small and micro enterprises" or "agriculture."
The types of pilot projects basically include cutting-edge technology and the latest applications of financial technology.
KPMG's "Innovation and Practice Revelation of China's "Regulatory Sandbox"" research report released in November divides in-box projects into six categories: digital credit, payment, innovative banking, underlying technology, securities, wealth and capital markets, and insurance technology.
In terms of technology, the most widely used technologies in banking and related industries such as big data and artificial intelligence are the most popular.
Among them, 50 projects mentioned big data technology, and 42 projects mentioned artificial intelligence, machine recognition, speech and image recognition, etc., and 26 projects related to blockchain and distributed ledger technology, cloud computing, Technologies such as 5G, autonomous driving, and the Internet of Things have also repeatedly made the list.
KPMG believes that as more technologies develop to the application stage in the future, the key industries of financial technology innovation may migrate, and the distribution of technical elements of in-box projects will gradually change.
Sun Yang, a researcher at the Suning Institute of Finance, pointed out that it is possible to develop towards the back-end of financial operations and try financial RPA (Robot Process Automation Technology) to improve the efficiency of financial institution operations and enhance the happiness of financial employees.
It is possible to explore the combination of finance and machine vision, satellites, and IoT sensors. “The risk control of small and micro enterprises is clearly moving from online to offline. It is hoped that financial technology companies can help financial institutions accelerate the establishment of online and offline integrated small and micro risk control. system."
"You can also explore the application of blockchain and digital RMB in cross-border payment and cross-border clearing and settlement, and let the blockchain go out and enter the competitive sequence of global financial infrastructure through advanced technology." Sun Yang said.
Li Feng, a professor at Shanghai Advanced Institute of Finance and deputy dean of the China Financial Research Institute, pointed out that in the current pilot phase, most of the in-box testing projects are technological innovation and process optimization. For example, improvements in credit, supply chain finance, and payment are limited to To improve financial services, there is insufficient innovation in financial service business models.
It is recommended to encourage more financial business model innovation, combining advanced technology and processes to promote the high-quality development of financial services.
Pilot areas have industrial advantages, and Beijing’s three batches of lists "changes in focus"
KPMG believes that in addition to the corresponding economic conditions and technological innovation levels, the cities (regions) selected as pilots are also extremely well-equipped with supporting policies and implementation plans.
It is mainly reflected in: possessing industrial advantages, a developed financial market, and sufficient scientific and technological resources; having good policies and supporting service space, and constantly advancing the creation of financial technology application scenarios.
"The nine pilot regions have a certain technology industry foundation, and have a certain scale of real economy and financial institutions. The regions are also the most important economic regions in China (the Beijing-Tianjin wing, the Yangtze River Delta, Guangdong, Hong Kong, Macao and Chengdu). Chongqing area), and there are several areas for the central bank's digital currency testing." Li Feng said.
Beijing, as the first city to open the "regulatory sandbox", has released three batches of pilot lists.
"In terms of project content, from the initial stage, it was mainly loan-related projects to more extensive service and technology verification projects." said Wang Zhicheng, associate professor of finance at the Guanghua School of Management, Peking University.
Li Feng also pointed out that the first batch is mainly based on bank digital credit products, all of which are applied by licensed financial institutions, and they are all banking institutions (including UnionPay). The second and third batches are gradually expanded to a larger range. The application scenarios of licensed financial institutions (banks, insurance, payment, etc.) and technology companies are gradually expanding.
From a technical point of view, the proportion of blockchain technology has increased batch by batch, with 1 in the first batch, 2 in the second batch, and 4 in the third batch.
Sun Yang said that the first batch has obvious characteristics of smart finance, the second batch has obvious anti-epidemic genes, and the third batch of blockchain and the Internet of Things has more obvious technical characteristics, obviously through blockchain and the Internet of Things. It is obvious to promote the integration of finance and the industrial chain Internet, and to create an industrial chain financial strategy, such as the blockchain state power investment supply chain financial platform, and the Guangxintong blockchain industry financial service platform. "The focus has obviously changed."
Zhang Xiaoyan previously told The Paper that the Beijing pilot application is biased towards general technological innovation, the Shanghai pilot application is biased towards industrial planning, and the first batch of innovative products announced by Shenzhen is biased towards very specific financial business services.
She believes that Beijing has very rich financial technology resources. In addition to the advantages of financial regulatory resources, there are large financial institution headquarters and financial technology subsidiaries, a number of well-known large-scale technology and Internet companies at home and abroad, and a number of start-up companies in segmented fields. Therefore, most of the Beijing pilot application declarations are financial institutions and large-scale technology or Internet companies with greater influence across the country.
Regarding Shanghai, Zhang Xiaoyan believes that the "Implementation Plan for Accelerating the Construction of Shanghai Financial Technology Center" issued by Shanghai in January proposes that Shanghai will be built into a globally competitive financial technology center within 5 years. Therefore, the exploration of the financial technology "regulatory sandbox" is important for Shanghai's innovation Financial technology regulation is very important and can serve Shanghai's policy and industrial planning.
The first batch of innovative products announced by Shenzhen is biased towards very specific financial business services.
The first batch of 4 pilot applications showed strong regional characteristics and geographical advantages. Shenzhen, as a frontier city open to the outside world, its innovative applications serve unique urban positioning, such as verification of salary for foreigners based on blockchain technology.
Sun Yang told The Paper that Beijing focuses on AI and blockchain, Shenzhen, Xiong’an New District, and Suzhou focus on digital RMB pilot projects, Chongqing focuses on risk control technology for small and micro financial technology and the promotion of rural finance, and Shanghai focuses on The financial risk control technology of the industrial chain based on blockchain and big data promotes the integration of finance, industrial chain and digital government affairs. Hangzhou focuses on big data, blockchain and distributed ledger technology. Hangzhou's e-commerce big data is relatively developed; Guangzhou It focuses on cross-border financial service security and small and micro financial risk control. Guangdong has more foreign trade financial services and more small and micro enterprises in the manufacturing industry.
Li Feng also mentioned that at present, the projects selected in various places are mainly related to different local city positioning and industrial foundations. For example, Beijing has more basic technology applications, Shanghai has more emphasis on blockchain, and Shenzhen has obvious characteristics of export-oriented technology applications. While Chengdu, Chongqing and other places have relatively distinctive characteristics (such as serving small and micro enterprises, agriculture, rural areas and farmers), while Suzhou focuses on serving the Yangtze River Delta.
Pilot areas "can help pilot digital RMB applications", and expansion can be considered in "second and third tier", "third and fourth tier" cities
In the future, the regulatory sandbox will continue to advance.
Su Xiaorui, a senior researcher at the Sack Research Institute, believes that, on the one hand, the scope of the pilot program will continue to increase. Pilot cities will radiate to the surrounding areas through "points and areas" to jointly create a prosperous economic circle for financial technology in the region.
On the other hand, the pilot batches will be gradually accelerated. After the pilot projects of water innovation projects in various regions, the application process and evaluation methods will be continuously summarized and optimized. The pilot batches will also be accelerated with the improvement of work efficiency.
KPMG suggests that for large and megacities that already have a sound financial and technological foundation, and have accumulated certain experience and resources during the pilot operation of the “regulatory sandbox”, they can use this as a starting point to promote financial innovation and standardize finance. Scenario construction, enhance the competitiveness of the payment market system, and actively participate in the pilot tasks of the central bank's digital RMB application in various scenarios from the policy and project levels.
Sun Yang proposed: First, consider the sense of acquisition of small and micro enterprise customers, and whether the perception is strong or not is one of the evaluation criteria. It should not only be the pilot of financial institutions and financial technology companies, but also understand the customer's feelings about the pilot; second, promote finance and scenarios The integration of the industrial chain has always been a major issue in the financial industry. Supervision can encourage financial institutions to deepen the integration of the industrial chain through financial technologies such as the Internet of Things, biometrics, and AI, and promote the depth and breadth of the integration, and promote the true financial Cover the entire chain of industry chain finance.
But Li Feng believes that it is not appropriate to expand the encirclement in the short term.
On the basis of observing the results of the current regulatory sandbox testing in 9 regions, we must summarize experience and gains and losses, and then extend the existing results to other cities in the future.
When choosing a pilot city, it is necessary to consider the local technological development status and industrial characteristics, and proceed steadily and orderly.
Who will be included in the next batch of pilot cities?
Sun Yang believes that some second-tier cities can be selected, and some small and medium banks can be selected as pilot objects.
For example, Qingdao, Shandong, you can look at the application of financial technology in the port trade ecology. For example, Changchun, Jilin, can be used for the application of financial technology in the traceability of agricultural products. For example, in Nanjing, you can explore IoT finance and blockchain supply around some large core platform companies. Chain finance.
"Second-tier or even third-tier cities have less developed finance than the first-tier cities, but the industry chain ecology is also relatively active, which is a weak point in the integration of finance and industry chains. Fintech supervision of sandbox pilots in these places will help promote better financial services to the real economy. "He said.
Chen Wen suggested that considering that the main weakness of inclusive finance is still in areas with insufficient financial coverage, the next step of the pilot should consider the needs of inclusive finance in third- and fourth-tier cities and even the needs of rural financial services in county economies. Only the fintech that can be effectively implemented in the fourth-tier cities can truly support the future of China's digital financial inclusion."
At present, both Hainan and Hunan have proposed to promote the regulatory sandbox model.
On December 8, according to Hainan Daily, the "Proposal of the Hainan Provincial Committee of the Communist Party of China on Formulating the Fourteenth Five-Year Plan for National Economic and Social Development and the Long-Term Goals for 2035" proposed that the pilot application of legal digital currency should be promoted. Cultivate and build "blockchain + finance" industrial clusters, and promote the implementation of the "supervisory sandbox" pilot program.
On October 27th, according to the official website of the Hunan Provincial People’s Government, the General Office of the Hunan Provincial People’s Government issued a notice on the issuance of the "Hunan Province Blockchain Development Master Plan (2020-2025)", proposing that in terms of supervision, Hunan Province will build tolerance A prudent "regulatory sandbox" model.
Take the blockchain industrial park as a pilot, establish a fault-tolerant mechanism and an inclusive and prudent regulatory mechanism, create a loose and open market access environment and regulatory environment, and promote the construction of pilot projects.
Wang Zhicheng said that it should be fair and reasonable to extend to all provincial capitals and separate cities from a national perspective.
Because the economic institutions and characteristics of different regions are still quite different, if the current regions cannot be promoted and limited, the development of the regional economy is unfair.
"Give more participation opportunities for non-licensed institutions"
According to the published list of pilot projects, the subjects participating in the pilot are the four major banks, other commercial banks, insurance companies and other traditional licensed financial institutions, as well as technology companies under Internet giants such as Ctrip, Baidu, Tencent, Xiaomi, and JD. Type enterprise.
Of the 70 projects, 34 projects are participated by pure financial institutions, and the remaining 36 projects are jointly declared and developed by financial institutions and technology companies. The two types each account for about half.
KPMG China believes that this stems from the fact that mainstream technologies such as big data, AI technology, and blockchain have a high degree of applicability to the banking industry, and the large amount of data resources and business scenarios accumulated by banks also enrich the materials and applications of technology. Cases, at the current stage, the banking industry has become a key industry for the innovation and development of financial technology, and it has driven related payment companies to jointly promote technology products and services.
Zhang Xiaoyan believes: "The cooperation between leading Internet companies and financial institutions will help emerging technologies such as cloud computing and big data promote the transformation and upgrading of traditional financial services such as credit."
KPMG China judges that although the number of non-financial institutions participating in the pilot is far smaller than the number of financial institutions, technology companies in the market are still the main force in technological innovation. In the future, financial institutions will accelerate their cooperation with external parties while strengthening their own innovation and development capabilities. The process of mutual cooperation and learning between science and technology enterprises or with ecological environment enterprises can accelerate the pace of technological innovation and realize the iteration of related technologies as soon as possible.
Wang Zhicheng pointed out that from the three batches of “supervisory sandbox” pilot list in Beijing, the participating institutions were initially the four major state-owned banks, and now the proportion of projects dominated by technology companies is gradually increasing.
"At the same time, all activities currently used are the participation of licensed financial institutions. More opportunities for non-licensed institutions should be given to participate. All regions should give fair competition and try to adapt to local conditions." He said.
Li Feng also suggested that the scope of participants needs to be expanded. In addition to banks, financial institutions should gradually expand the participation of insurance, stocks, exchanges and other financial industry-related institutions, and increase the participation of technology companies (including small and medium-sized scientific and technological enterprises).
At present, technology companies must cooperate with financial institutions to obtain application projects. In the future, independent application projects of technology companies that meet certain conditions may be considered.
He also said: "Keeping competition neutral, in addition to the existing licensed financial institutions and large technology companies, encourage private, start-up and foreign-funded institutions to also participate. Encourage more originality rather than redundant repetitive innovation projects ."
Or it may enhance transparency, "prudential supervision", and implement lenient entry and strict exit
"It would be great if the effect data of some projects could be published through authoritative websites, so that you can see which projects are better and more popular. This will also encourage companies participating in the pilot to provide high-quality cases and be serious. Do pilot projects and make the project bigger and better." Sun Yang said.
Wang Zhicheng put forward suggestions in the quasi-out link of the supervision sandbox.
Wang Zhicheng said: “What should be implemented is lenient entry and strict exit. There is a relatively strict elimination mechanism. The entry conditions should be greatly relaxed to facilitate innovation. Real innovation often has many defects in the early stage and is not easy to obtain regulatory approval, so it is necessary. Use the supervision sandbox. The export of the project should be strictly controlled, and there should be wider social participation and feedback."
The Central Economic Work Conference from December 16 to 18 proposed that financial innovation must be carried out under the premise of prudential supervision.
This may point the way for the future "regulatory sandbox" pilot.
"Innovation based on financial technology must fully identify risks, protect consumers' rights and interests, and have adequate risk response methods. In fact, it requires that the regulatory sandbox must be well done and implemented." Sun Yang said.
From a regulatory perspective, Li Feng suggested that it is necessary to focus on “technology demonstration-driven innovation” and “information penetration and protection and control of financial and technological risks”, and focus on risk control while promoting financial innovation.
He said that in the future, the government will not only strengthen business communication with enterprises, but also need to vigorously develop regulatory technology, respond to regulatory sandbox testing procedures and prevent financial technology risks through the use of ABCD and other emerging technologies and regulatory innovations.
Closely link the effects of the pilot evaluation with industry access and the improvement of regulatory rules.
Li Feng also mentioned: "The current supervisory bodies are mainly the People's Bank of China and its branches. It is recommended that other supervisory authorities (such as the China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, etc.) need to participate and coordinate and cooperate in the future. It is recommended to summarize successful experiences and failure lessons in time. Accumulate experience for the introduction of a digital financial supervision system in the future."