Call for more dig­i­tal bank­ing to boost in­clu­sive fi­nance

China Daily (USA) - - BUSINESS - By MASI andWANG YANFEI Con­tact the writ­ers at masi@chi­nadaily.com.cn and wangyan­fei@chi­nadaily.com.cn

A cen­tral bank of­fi­cial on Fri­day called for wider use of dig­i­tal tech­nol­ogy in or­der to pro­mote in­clu­sive fi­nance among low-in­come groups, while build­ing a proper le­gal frame­work to re­duce on­line fi­nan­cial risks.

Yi Gang, vice-gov­er­nor of the Peo­ple’s Bank of China, said at a fo­rum in Bei­jing that dig­i­tal tech­nol­ogy could help low-in­come and dis­ad­van­taged peo­ple quickly ac­cess fi­nan­cial ser­vices at low costs, which is in line with what in­clu­sive fi­nance was about.

“But it is also of con­sid­er­able im­por­tance to bal­ance the ben­e­fits and risks in fi­nan­cial in­no­va­tion. More ef­forts are needed to build a proper le­gal frame to help reg­u­late the ex­pand­ing in­ter­net fi­nance industry,” Yi said.

His com­ments came ahead of the up­com­ing G20 Sum­mit, which is to be held in Hangzhou, cap­i­tal of Zhe­jiang prov­ince, from Sept 4 to Sept 5.

At the sum­mit, China will pro­pose a set of prin­ci­ples to help ex­pand in­clu­sive fi­nance, and par­tic­i­pants will also dis­cuss how to pro­mote green fi­nanc­ing in de­tail, Yi said.

In­ter­net fi­nance is grow­ing rapidly in China, with in­ter­net heavy­weights such as Alibaba Group Hold­ing Ltd and Ten­cent Hold­ings Ltd—as well as tra­di­tional fi­nan­cial in­sti­tu­tions—all eyeing the sec­tor for growth.

In 2015, the third-party mo­bile pay­ment mar­ket in China ex­ceeded 16 tril­lion yuan ($2.4 tril­lion), mark­ing a yearon-year rise of 100 per­cent, data from Bei­jing-based in­ter­net con­sul­tancy Analysys showed.

Ac­cord­ing to Yi, Ali­pay, the mo­bile pay­ment tool run by Alibaba’s fi­nan­cial af­fil­i­ate Ant Fi­nan­cial, is an ex­am­ple of how tech­nol­ogy can help more peo­ple ac­cess af­ford­able fi­nan­cial ser­vices.

“Ali­pay has more than 400 mil­lion users, and it con­sid­er­ably low­ers the cost of han­dling each pay­ment trans­ac­tion,” he said. More im­por­tantly, about 150 mil­lion of Ali­pay’s users are from ru­ral ar­eas.

With the rapid adop­tion of the in­ter­net, more Chi­nese con­sumers can now en­joy a wide range of fi­nan­cial ser­vices on­line, from loan ap­pli­ca­tions, to buy­ing in­surance or buy­ing shares.

Meng Jing con­trib­uted to this story.

Yi gang, PBOC vice-gov­er­nor

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