Tech Revolutionizes Financial Services

The financial industry is undergoing a significant transformation driven by the rapid advancements in technologies such as artificial intelligence (AI), big data, and cloud computingAs these technologies become more integrated into financial services, organizations are finding opportunities to reduce operational costs, enhance service efficiency, and expand the accessibility of financial products to a broader audienceHowever, the pressing question remains: how can financial institutions leverage cutting-edge technologies to not only improve the quality of their services but also empower the development of the industry as a whole? To explore this, we interviewed leaders from financial institutions and industry experts.

Revolutionizing Financial Ecosystems

According to Shang Fulin, the Chairman of the China Wealth Management 50 Forum, technology plays a crucial role in improving the efficiency, accuracy, and inclusiveness of financial services, fundamentally altering the ecosystem of the finance sector

He emphasized that big data technologies enable financial institutions to make more precise assessments of customer credit risks, thus minimizing information asymmetriesMoreover, AI's potential stretches across multiple areas—from risk assessment to intelligent investment advisory and trading strategy optimization.

The rapid evolution and iteration of new technologies have had significant implications for the financial industry, particularly as it functions primarily as an information processing sectorYang Tao, the Deputy Director of the National Financial and Development Laboratory at the Chinese Academy of Social Sciences, stated that under the commitments to compliance and safety, broader applications of groundbreaking technologies in financial service innovation are now essential for enhancing high-quality services to the real economyAs generative AI models start making inroads into finance, they are expected to improve automation, intelligence levels, decision-making, management processes, and risk control efficiency.

Qian Bin, Vice President of Bank of Communication, highlighted that the banking sector is standing on the brink of a new technological revolution and industrial change that presents significant opportunities

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He noted that while advancing in AI, it is vital to prioritize the value extraction of data elements, along with bolstering research in AI technologies and actively embracing large modelsIt is imperative to construct an ecosystem that fully integrates digital and intelligent applications in finance, thus enhancing the effectiveness of technology transfer.

Fostering Inclusive Finance

In November, there was a push to utilize data elements and digital technology as key drivers for accelerating the digital transformation of financial institutions, aiming to improve the convenience and competitiveness of financial services.

The finance industry, characterized by its data-intensive and technology-heavy nature, faces unique challenges when it comes to digital transformation; it is not merely about empowering existing systemsOn the demand side, technological innovations have spawned various new industries, business formats, and models, each with distinct financial needs that differ substantially from traditional economic forms

This necessitates a better alignment of financial services with these emerging needsOn the supply side, intelligent technologies are streamlining financial decision-making while expanding the reach and coverage of financial services.

Moreover, additional challenges persist within the small and micro-enterprise loan sector, particularly the longstanding triangular dilemma between risk, cost, and scaleAs Zhou Xuqiang, President of Qifu Data Technology, pointed out, addressing this issue effectively hinges on the utilization of digital and intelligent technologies to restructure cost frameworks while maintaining robust risk control measuresHis company aims to deepen the application of large financial models by integrating conventional AI techniques into various lending stages, employing model-based evaluations and advanced data integration techniques.

The steady maturation of financial technology is enhancing the quality and effectiveness of services provided by financial institutions

Dong Ximiao, Chief Researcher at the Zhongguancun Internet Finance Research Institute, emphasized that financial institutions and tech companies must harness generative AI, represented by large models, to drive digital transformation and continuously innovate their product offerings, ultimately improving user experiencesA differentiated and unique growth path needs to be carved out in this rapidly evolving landscape.

At the same time, the accelerated application of technology has opened up feasible avenues for banks to extend their services to rural financial marketsPushes towards innovation have led rural commercial banks to develop online lending products aimed toward promoting inclusive financeFor instance, Pingyang Rural Commercial Bank provides various online financial services to farmers in areas such as wealth management, financing, and daily life support, while Liandu Rural Commercial Bank has launched promotional campaigns to boost online lending options.

On December 5th, Beijing Rural Commercial Bank provided a 10.2 million yuan loan secured by data assets to a subsidiary of Beijing Shou Nong Food Group

A representative from the bank explained that data assets are a new form of assets arising from the digital transformation of the economy and society in ChinaTheir collaboration with Shou Nong Livestock Company explored novel pathways for data assetization, using the economic value of data as the key guarantee for lending funds, involving partnerships with independent third-party evaluation firms and relevant institutions throughout the process.

Ensuring Safety and Compliance

As the pace of technological updates accelerates, financial technology encounters multiple challenges, including data breaches, privacy issues, and regulatory complianceConsequently, it is essential to maintain a firm stance on safety while advancing fintech.

Academician Chai Hongfeng of the Chinese Academy of Engineering highlighted that in a secure digital financial ecosystem, the industry can deploy self-certification and third-party verification mechanisms

Such approaches employ innovative technologies to solidify the security underpinnings of the digital finance landscape.

There are calls for financial institutions to bolster their risk prevention capabilities and safeguard overall financial securityExpert Chen Siqing emphasized the importance of actively guiding the application of new technologies in finance while enhancing regulatory tech systems to ignite innovation in fintechEstablishing robust standards, guidelines, and ethical norms regarding fintech applications is critical to anticipating and mitigating risks associated with new technologiesFurthermore, an agile governance mechanism must be put in place to adapt to the rapid changes in technology.

Experts agree that while AI serves as a double-edged sword ushering in both a revolutionary technological shift and a host of risks, establishing trustworthy and responsible AI systems is paramount

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