By Dai Qi
Fintech, which refers to technologies used and applied in the financial service sector, has become a buzzword in the financial industry at home and abroad.
China's securities regulators said on Wednesday that it would digitalize its supervision methods based on big data and artificial intelligence technologies in a bid to further crack down on illegal activities and to protect Chinese investors.
In a recent interview with China Fortune Media, Commissioner Emilio B. Aquino from the Philippines Securities and Exchanges Commission said that they saw a lot of merits in technologies like artificial intelligence and blockchain.
"Very recently, we are trying to gather regulation methods from around the globe, and that is why I came here to attend the Belt & Road Fintech Advanced Program by Tsinghua PBC School of Finance to obtain these experiences here," he said.
The country is going to issue a regulation on initial coin offerings (ICOs) as well as on cryptocurrency.
"We are going to come up with the policy at least within the year. We are not going to regulate the technologies behind these services, but to restrain the people who are using these technologies to swindle money out of others," Aquino said.
Wecash founder Li Hao told China Fortune Media that he thought artificial intelligence was beneficial to people in doing repetitive work, which could provide man with more time to do creative jobs.
As a tech company, Wecash adopts artificial intelligence related technologies to help financial institutions in their risk management practices or customer acquisition, according to Li.
"I think artificial intelligence brings much fewer risks than a man doing repetitive work. Man's decisions can be influenced by his emotions, and he might introduce his personal biases. However, artificial intelligence cannot get angry or tired, so there will be fewer risks than before," he said.
But is fintech beneficial to all kinds of situations? Or will it bring some potential risks?
Li believes that artificial intelligence might also bring some potential risks along with its merits.
"To avoid some risks, we have another monitoring system in place to observe if the artificial intelligence is doing everything well. The monitoring system is a combination of an automatic monitor and human beings, so I think it will make the whole system more secure," he said.
The Global Association of Risk Professionals (GARP) President Richard Apostolik thinks that high tech can actually bring more transparency and efficiency to the marketplace, but on the other hand it can also bring risks.
"One example would be if you start using artificial intelligence in the development of models, in model risk, most financial service organizations utilize models for a variety of internal and external functions such as developing capital-based approaches for a variety of activities. When you start getting involved in things such as self-learning models, that becomes a question mark. How do you manage those types of things? How do you stop them if they learn something wrong?" Apostolik pointed out.
Other things might happen if companies adopt technological advancements in order to increase efficiency, but these technologies don't necessarily completely fit into the whole system, as he also mentioned.
