China has a booming fintech industry, and the CSRC has the task of handling its regulation. It is estimated that over AUD$13 billion was invested in Chinese fintech ventures last year.
Under the Information-Sharing Cooperation Agreement (Agreement), The CSRC will be providing ASIC with information about innovation in financial services in its markets. This means that if a fintech start-up in China develops a new innovative way of micro-investing in property or converting cash to bitcoin, the CSRC will be able to provide guidance on how it handles the new technology.
The Agreement will work both ways, with ASIC agreeing to share information on regtech developments. The CSRC sees value in learning more about the ASIC regulatory system and how the Chinese system can be better regulated.
Why is this is good news for Australian fintech businesses? The ASIC Innovation Hub will have more resources and guidance to be able to assist develop regulatory systems for new fintech that facilitates the technology whilst providing the adequate protection and assurance for investors and consumers. With like-minded approaches to fintech regulation, it will be easier for Australian fintech developers to export to China, and for Australian consumers to benefit from Chinese fintech innovation.
China and Fintech
China’s fintech businesses have been developing technologies such as cloud services, Mobile computing, blockchain, internet of things, artificial intelligence and distributive computing. The Chinese fintech companies are bringing new ways to solve problems in all industries. Below are a few examples.
Quark Finance, a company based in Shanghai, has developed risk management systems for small and micro enterprises as well as individuals that assist in reducing human error during the credit assessment process.
PINTEC, located in Beijing, is using automated systems to provide loans to consumers, as well as online advisory tools for asset management.
Rong360.com Inc is using data to provide recommendations for individuals and small businesses searching for financial services.
Taiyiyun Technology is a National Equities Exchange and Quotations (NEEQ) quoted company that is developing blockchain to manage government records.
These companies would have obtained the appropriate approvals from CSRC, and it is businesses like these that we want to see developing in Australia, with as little burden coming from ASIC as possible. These technologies don’t only serve the financial industry but could be used with spectacular effects in industries such as agriculture and viticulture, retail, professional services, medical services and education.
Now is the time
If you are developing fintech, there has never been a better time to start discussing with ASIC how the technology can be used in Australia. The Innovation Hub provides a great resources for fostering new fintech businesses, and the added knowledge arising from this agreement will better equip ASIC to deal with new fintech ideas.
If you would like assistance in talking with ASIC about your business, or would like to discuss the agreement with the CSRC, please contact one of the Financial Services team.