What is a regulatory sandbox?
In the past few years, Internet financial innovations have been praised for their efficiency gains, while the risks behind them have been alarming. After centralized management, industry chaos gradually cease. When Internet finance gradually transforms to fintech, innovation and development are put on the agenda again. How to avoid risks in the development of innovation is a difficult problem faced by regulators and practitioners.
On October 12, 2019, the people's bank of China (pboc) and six other ministries and commissions officially approved the pilot project of fintech application in Beijing. On December 5, the people's bank of China (pboc) announced that it supports the pilot regulation of fintech innovation in Beijing. On the same day, the Beijing municipal bureau of finance said it would explore building a Chinese version of the "regulatory sandbox" that is inclusive and prudent.
The so-called regulatory sandbox refers to the implementation of regulation in a controlled environment so that the new product/model can be iteratively verified in the real market environment to eliminate the false and preserve the true. Allow users to access new products under the premise of protection, enjoy the efficiency of the new model without being hurt by the risk. The regulatory sandbox, pioneered by the UK's financial conduct authority, quickly became an international phenomenon and was seen as an innovation in the fintech regulatory model.
Che ning, deputy secretary general of Beijing network law society, introduced that the supervision sandbox has three characteristics. Secondly, isolation. A set of unique sandbox mechanism isolates risks, which will not affect the actual business carried out externally, and to a certain extent, exempts enterprises from legal liability for their behaviors. The third is the monitoring, there is a certain monitoring mechanism, and continue to observe and identify risks.
What are the standards for "packing"?
So what innovative applications of fintech are worth testing in this financial regulatory laboratory?
According to a person familiar with the situation, the criteria for the first batch of projects mainly include four aspects. Second, from the perspective of participants, it should be the participation of a licensed financial institution or the joint application of a licensed financial institution and a technology enterprise; Third, from the perspective of necessity, it should be that traditional means cannot be effectively regulated and can only be explored through supervision sandbox. In addition, from the perspective of risks, institutions need to prepare effective risk prevention and control and resolution mechanisms in advance, so that consumers can effectively repay losses once they occur.
The first batch of projects and standards also confirmed the four principles of supervision sandbox revealed by relevant people of the people's bank of China before: first, to adhere to the basic principle of technology neutrality; second, to abide by the basic business rules as an important prerequisite; third, to prevent financial risks as the main task; fourth, the development of the service industry as the core concept.
Although the first batch of applications that meet the inclusion criteria are not many, according to the information disclosed by regulators at the "Beijing fintech innovation media exchange" on December 7, 2019, 46 fintech pilot projects involving 77 participating financial institutions and technology enterprises were approved by six ministries and commissions in Beijing. It is foreseeable that more institutional applications will soon be included in the regulatory sandbox.
These innovative application scenarios are closely related to people's consumption, credit, payment and financial management. They make full use of new technologies such as big data, blockchain and 5G to improve people's financial experience.
1. Industrial and commercial bank of China: Internet of things with transaction value exceeding 50 million
Icbc said the Internet of things applications based on Internet of things technology collection and product manufacturing, quality inspection, inventory, logistics, sales data, the whole life cycle characteristics, such as not tamper with the record on the chain block, and connected to the icbc Internet service platform and intelligent management system (ECSP), realizing a complete chain of product quality control and information transparency. "It is expected that after the comprehensive promotion, the number of individual customers will exceed 300,000, the number of annual transactions will exceed 1 million, and the annual transaction amount will exceed 50 million yuan."
2. Agricultural bank of China: automatic loan of 100 billion RMB micro credit
Through the construction of cloud rating, cloud credit and cloud monitoring models, accurate portraits of customers can be achieved, and the loan model operated on the whole process line can be created to effectively realize the fast application, fast audit and fast loan of financing for small and micro enterprises. It is expected that by the end of 2020, there will be 150,000 customers with outstanding loans of no less than 100 billion yuan.
3. China citic bank, unionpay, duxiaoman payment and ctrip: China citic bank zhiling products
Users do not need to tie up their CARDS in the third-party APP. Instead, they can easily generate "smart tokens" for different financial service scenarios through the APP of citic bank. It is expected to have 10 million users.
4. Citic baixin bank: API open bank
AIBANKInside products mainly realize four aspects of capabilities :(1) one-stop speed access capability for financial services, and minute-based configurable access; (2) high service quality and controllable ability to achieve agile gray scale publishing; (3) scene service customization ability to realize the "lego" of financial services to be combined into different scene solutions; (4) intelligent cross-border matchmaking, realizing a multi-symbiotic ecosystem of service providers, consumers, scenes and third-party application developers.
5, bank of ningbo: "borrow and return" fast review fast loan
You only need to provide scanned copies or original photos of the business application form, identity certificate, business license, credit authorization, mortgage certificate and other materials, without providing paper copies. During the credit period, the amount of credit can be borrowed and returned at any time, so as to realize the capital "borrow at any time for shortage and pay back at any time for surplus", which can effectively save financial costs.
6. Unionpay/mi/jd: mobile POS that can activate 4 billion IC CARDS
Just download and install a software on the phone, the phone can be used as a POS machine, swiping a card to receive orders in minutes. Unionpay said mobile POS would help significantly reduce terminal procurement and maintenance costs for agencies receiving orders, accelerate the development of the small and rural cash register market, and potentially activate the use of the existing 4bn bank IC CARDS.