People pass in front of the headquarters of the People’s Bank of China (PBOC), the central bank, in Beijing, China, on September 28, 2018.
Jason Lee | Reuters
BEIJING – The Chinese central government is making it clear that fintech technology companies like Ant Group are under the same strict financial regulation as banks.
Many emerging companies in China and other countries use new technology to sell financial services faster and faster, from money transfers to loans. The rapid adoption of consumers has driven banks to work with emerging companies, which often emphasize that they are technology or fintech companies, rather than financial institutions.
“But fintech remains essential financing, so the principle of‘ same business, same rules ’should be applied,” Pan Gongsheng, deputy governor of the People’s Bank of China, wrote in an opinion piece. in the Financial Times on Wednesday. Pan also heads the national currency regulator, the State Currency Administration.
“We need regulation that emphasizes the bottom line and not the shape of a company,” Pan added. “The goal is to align business rules and regulations with regulations to defend arbitration.”
Chinese authorities have stepped up regulation of fintech technology companies in recent months.
Most notably, regulators abruptly suspended the listing of Alibaba-affiliated ants in November, just days before the company set out to celebrate what would have been the world’s largest initial public offering.
Pan did not mention Ant by name in the opinion, but noted that “the non-bank mobile payments business, led by Alipay and WeChat Pay” experienced 75% annual growth between 2015 and 2019 in non-bank mobile payments. Ant Group owns Alipay and WeChat Pay is run by Tencent.
He added that fintech companies pose the same risks as others in the financial industry, and that they could also collect “excessive” amounts of data and infringe on users ’privacy.
On Tuesday, Chinese Central Bank Governor Yi Gang indicated that Ant could resume the IPO process if it could resolve legal issues.
Read the full opinion article in the Financial Times here.