The rise of the internet has brought a revolution to the way people and companies work. With rising of complex and efficient technologies our lifestyle and work environment have improved and changed immensely. Tightening Effect of Chinese Government on FinTech (financial technology) companies which are the financial companies that provide financial services such as insurance, online payments, debts, loans, etc., using technologies such as AI, Big data, RPA, and Blockchain. They were introduced into the world of financial business to enhance the process of traditional financial services to work more efficiently. They collect financial data of their customers and analyze it to have a better understanding of them and improve their services for them. Globally each year more and more customers opt for FinTech services and companies invest huge capital on technologies to facilitate the services.
However, like any other company and industry, Fintech companies have competitions and with the urge to stay at the top of their game there is a high chance of malpractices to secure investments, their negligence of customer’s overall satisfaction, and financial data security. Hence, it becomes necessary to develop rules and regulation to tackle and prevent such problems which ultimately affects the customer’s rights.
Developed countries such as Russia, Germany, European countries, America, etc., have a larger number of users of services provided by these companies. Almost all the entire country citizens access them for their own purposes. One such country is China which is a country where almost everything is digital. Whether be it micro or macro business, the exchange of goods and services and transactions within the businesses or between business and customers is mostly online. FinTech companies of China such as Alibaba Group Holdings Ltd., Tencent Holdings Ltd., and JD.com Inc., provide products via e-commerce and runs online payment platforms to buy products, pay loans, etc. They have very few governmental regulations and are generally free from any supervision which was necessary to have because of their rapid expansion in global markets. The risk of online hacking, display of fake products, etc, and other online issues becomes very high.
In the last year, 2020 china’s government has announced to tighten the regulation of regulatory bodies People Bank of China (PBOC) to supervise, guide, and take measures to prevent violation of rules and provide absolute transparency of companies. Since some of these companies have the largest customers within the nation as well as at the international level. Their cybersecurity quality must be checked, supervise and strengthen if they are seeking to do business at an international level.
These new policies and vows led many leading companies to shaken up. Ant Group, a subsidiary company of Alibaba Group Holdings Ltd., is the owner of the Chinese largest online payment platform Alipay. The company’s billion dollars Initial Public Offering (IPO) was temporarily removed from the stock market listing by China which led to the disqualification of the company’s IPO from following Shanghai’s and Hong Kong’s stock market listing causing a huge drop in the parent company’s value at U.S. trades. This breaking news made regulating bodies strictly examine this and other companies’ activities. Further, the parent company of Ant Group, Alibaba Groups was fined billions for breaking anti-monopoly laws and was ordered to review and rectify the problems regarding the protection of customer’s and merchant’s data, integrity supervision within the company.
These shocking events regarding Alibaba Groups have made the regulating body gain the public’s faith and vow to look more closely at other FinTech companies as well to improve their impact on the public and economy.
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