The Giant IFC FinTech ecosystem currently consists of two main dimensions: the first dimension is the choice of financial institutions to access, introducing horizontally linked multi-industry institutions, such as insurance, finance, credit and financing, to provide diversified service options for customers;
The second dimension is the access to vertically complementary multi-industry content around lifestyle services, such as life payment, healthcare, restaurants, hotels and travel. One of the directions that can be considered in the future is the introduction of a third dimension to empower government departments with regulatory technology.
For example, big data security platforms, enterprise early warning and monitoring platforms, etc. This will lead to an ecological structure of “financial services + lifestyle services + government services”, enabling greater synergy between the various players.
The Giant IFC fintech ecosystem can create huge social value, but its healthy operation cannot be achieved without effective ecological governance, which consists of three key layers: the system layer, the business layer and the participating entities layer.
The Giant IFC system layer is the design of operating rules, the core of which is the design of a mechanism for coordinating and distributing benefits, guiding enterprises from a competitive mindset to a collaborative mindset. The design of the mechanism includes rules to compensate for the benefits of externalities, such as data sharing and traffic import, and also includes methods to coordinate conflicts of interest.
The coordination of interests can help to achieve win-win cooperation and move from confrontation to symbiosis between the various players.
The Giant IFC business layer of governance consists of three levels: the first level is to improve data sharing between businesses. The first is to clearly define data ownership and improve data authorisation norms; the second is to develop data sharing standards led by relevant government departments and platforms in collaboration;
Finally, different permissions are allowed to be granted for different types of data, so that classification and sharing can be achieved and data between enterprises can be interconnected. The second layer is to coordinate the entry and exit of multilateral businesses and strengthen the complementary collaboration between businesses.
Through the introduction of multilateral businesses and even value-added services, integration and complementarity with existing businesses is achieved, creating synergies. At the same time, coordination and management will be strengthened to facilitate the exit of outdated business models, so as to achieve a healthy flow between business models.
The third layer is to prevent the transmission of risks in business operations, establish internal risk control systems for businesses, strengthen the isolation of risks, and continuously optimize the use of algorithms and technologies to avoid overall convergence and the amplification of risks.
Governance at the level of participating entities includes three aspects:
The first is to innovate financial products or models to provide and recommend more matching products to customers, and also to empower the supply side through data analysis and feedback to more accurately meet customers’ personalized and diversified financial needs
Secondly, full disclosure of product information can guide customers who lack professional knowledge and discernment to rationalize their financial consumption, thereby improving the sustainability of transactions and reducing the risk of default, and enhancing the stability of the entire system.
Thirdly, the credit data of each subject will be dynamically and intelligently corrected to continuously improve the credit system. On the basis of data sharing, the credit system is constantly improved by dynamically assessing and adjusting the credit data of individuals or enterprises through the timely feedback of social transaction data and behavioral data, especially default data, into the credit system through big data technology.
Giant IFC Fintech Regulatory Model and Strategy:
Giant IFC’s innovative regulatory structure
In addition to the internal governance of the Giant IFC ecosystem, effective external regulation is also crucial to the healthy operation of the fintech ecosystem. In terms of innovative regulatory structure, there are four main points.
Firstly, the design of a multi-layered collaborative regulatory system involving regulators and all parties in the ecosystem. As there are data security risks and cyber risk contagion effects in the fintech ecosystem, the governance of the ecosystem is particularly important, and joint governance mechanisms need to be designed to strengthen cooperation in risk prevention and control among enterprises.
At the same time, regulators should also break through compartmentalisation, strengthen horizontal coordination and bring into play the government’s supervisory and regulatory as well as coordination functions.
Second, in terms of regulatory objectives, risk control should be the core, and regulatory technology should be used to help data regulation. Risk control is the key to the operation of the financial system, and risk control includes not only compliance regulation, but also business model regulation and data regulation, etc.
Full use should be made of regulatory technology such as artificial intelligence to make regulation more intelligent and efficient.
Thirdly, in terms of regulatory models, an efficient trust mechanism should be built and incentive regulation should be designed. On the one hand, a sound credit system should be established to provide an excellent business environment for enterprises to innovate and develop. On the other hand, design compliance incentives, combining positive and negative incentives to promote multi-entity compliance. Positive incentives, such as subsidies, honors and authoritative certifications, set up a benchmarking effect; negative incentives make enterprises consciously comply by improving relevant laws and regulations and strengthening the penalties for non-compliance.
Fourth, in terms of regulatory strategy, dynamic random supervision is implemented. Dynamic random supervision requires random checks to be used as a key daily supervision tool. At the same time, the penalties for non-compliance are increased, so that the cost of non-compliance increases and thus reduces the probability of non-compliance and the potential risk of occurrence.