Oct 15, 2021
Regulatory Challenges: The Variation and Impact of Fintech
Fintech has rapidly formed a new financial ecology outside the traditional financial system, just as a new city is formed outside the old city. The financial reengineering project bypass many traditional financial supervision and laws. These changes urgently need to restructure financial supervision to cope with the technology-driven financial industry that is constantly accelerating iterative innovation.
Technological innovation brings quantitative and even qualitative changes in financial risks. Finance is closely integrated with technology in the process of development, and technological changes are rewriting the trading rules of the financial service industry, and at the same time risks arise. Fintech has greatly reduced the cost of connection between the providers of funds and the demanders, achieving high efficiency and low cost. At the same time, the characteristics of concealment, suddenness, contagion, and negative externalities of financial risks still exist. At the same time, financial, technological, and network risks are more likely to produce superimposition and aggregation effects, so that risks can be transmitted faster and spread more widely. Under certain circumstances, the technical and operational risks of financial technology will rapidly escalate from quantitative changes to qualitative changes, triggering financial systemic risks.