China Should Boost AI Regulation in Finance

A regulatory framework specifically designed for artificial intelligence in China’s financial sector and better tech for supervision should be introduced, according to policy advisors from a leading think tank.

We should not deify artificial intelligence as it could go wrong just like any other technology,» said Xiao Gang, senior researcher at China Finance 40 Forum and the former chief of the China Securities and Regulatory Commission.

The point is how we make sure it is safe for use and include it with proper supervision.

A report from the forum based in eastern China’s Qingdao city underlined that technology to regulate «intelligence finance» largely lagged development. Existing technology deployed in the sector to improve sales and investment returns, the report added, ranged from facial recognition to big data analysis.

Onlookers not only underline the potential tech risks which China could face in the future but also recent track record, most notably a failed attempt to create a sustainable peer-to-peer financial ecosystem. What was originally intended to be a source of financing for entities that lacked access to major state-owned lenders resulted in regulators being forced to shut down large parts of the industry with recent data showing that just 427 P2P platforms remained – a 59 percent drop compared to 2018-end.

Evaluation of emerging technologies and industry-wide contingency plans should be fully considered, while authorities should draft laws and regulations on privacy protection and data security, the report added.