Chinese banking regulator signals tougher fintech antitrust laws
Sign up for myFT Daily Digest to be the first to know about FinTech news.
A senior official at China’s banking regulator warned that technological advances in the financial sector risked creating monopolies, a day after Beijing unveiled new antitrust rules for the country’s largest internet groups.
The warning helped fuel a second day of sale Chinese tech stocks, wiping out a total of around $ 254 billion in market value on e-commerce groups such as Alibaba, JD.com and Tencent.
“Particular attention must be paid to the new risks induced by digital transformation [of financial services]”Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission, said at a forum in Beijing on Wednesday.” This is especially true with cybersecurity, data protection and market monopoly. ”
The remarks follow China’s publication on Tuesday of draft antitrust regulation for internet platforms targeting a range of monopoly practices common among online groups, such as the unscrupulous collection and use of customer data.
Analysts said the tougher official stance suggested Beijing was becoming less tolerant of the country’s burgeoning private financial technology companies, led by Ant Group, which until recently were hailed as a disruptive force in an otherwise industry. state dominated and very inefficient.
“Ant Group’s tastes have grown so much that the government now sees them as a drag rather than a driver of the economy,” said Bo Zhuang, economist at TS Lombard.
China’s fintech industry has come under fire after Beijing abruptly canceled the proposed $ 37 billion list from Alibaba’s online payments and lending arm, Ant Group, in Hong Kong and Shanghai.
The move follows a speech in late October by Alibaba founder billionaire Jack Ma, who criticized global financial regulation and the country’s public banks for being too focused on risk control.
Before the IPO, China launched a draft of new online lending rules that threaten to impose onerous restrictions on companies like Ant, ranging from limits on how much they can lend to individuals to tighter capital ratios.
Mr. Liang of CBIRC pointed out that financial technology is not “changing the nature of finance.”
“All kinds of financial activities need to be regulated,” he said. “[Businesses] must follow the same risk management practices, rules and requirements as long as they carry out financial transactions of the same nature.
A director of the consumer loans department of a large state-owned bank in Shanghai said Ant Group’s strong pool of consumer data had given the company an edge in rating borrowers that few lenders could compete.
“While the regulator has banned banks from outsourcing their risk control function, most of them lag behind Ant in both mastering the technology and collecting borrower data.” , said the banker.
Ant has previously refused to share its customer loan data with China’s central bank.