Research on development of Finance Technology in China

Abstract

Finance Technology is the integration of technology and finance. For technology especially in computer communication area such as internet has provided open sharing environment and concept of mutual involved. The strong idea has lead to advanced advantage on data acquisition and quantities’ analysis.  Another one, finance with internet know-how can easily achieve the asset resources allocation and reduce unbalanced asymmetric information. In recent years, these Chinese technology companies are heavily partnering with finance industry. On the other hand, the traditional financial institutions in China invest millions dollars into technology for the finance technology integration.  Finance and Technology are combined together that enable the reform of China's financial industry. Furthermore, the new direction has built different kind of financial ecological environment. These FinTech companies are the highlight of China’s economic development and growth. However, during the process of development, the unexpected risk has gradually exposed.  For example, recently some large-scale P2P platforms in China have many undelivered payments to their clients or the credit crisis from their investors. Unlike traditional banks, the FinTech has "crossover", "mixed" and "virtual" characteristics that also carries both financial and internet risk, highly infectious and relevant. If governments miss the trigger point of danger, it is easy to cause systemic risk in China. Currently, Chinese governments adopt the monitoring system is "separate operation, and separate supervision". Apparently, this regulatory system is definitely lagged behind the development of Chinese Fin Tech.

Keywords: finance technology, internet finance, P2P, financial risk, regulatory