China improves regulatory system to address fintech challenges: official

China has made continuous efforts on shoring up weak links in the financial regulatory system in the face of new challenges posed by financial technology, Yi Gang, governor of the People's Bank of China, has said.

Proper firewalls should be set up to forestall the cross-sector and cross-industry transmission of financial risks, Yi said in a video speech at a recent conference of the Bank for International Settlements on regulating big tech.

He also urged disconnecting improper links between financial information and business information to prevent monopoly in the closed loop of data, network and financial activities.

In recent years, China has seen continuous innovation in fintech, lowering costs and enhancing the efficiency of financial services in the country.

For instance, supported by large technology firms, the penetration rate of China's mobile payment services has reached 86 percent. Moreover, the digitalization of credit services helps to better meet the financing needs of small and micro companies, according to Yi.

However, the governor noted that the development of fintech has also brought new challenges, including conducting financial business without licenses, launching unfair competition by abusing market dominance and the excessive collection of consumer data.

In the next stage, China will continue strengthening the supervision of payments. Measures should be taken, including advancing the regulation of financial holding companies, as well as exploring more convenient data transactions and more reasonable data use, on the basis of ensuring privacy and data security, Yi said.