China must step up AI regulation in finance sector: Think-tank
BEIJING China should introduce a regulatory framework for artificial intelligence (AI) in the finance industry and enhance technology used by regulators to strengthen industry-wide supervision, policy advisers at a leading think-tank said yesterday.
"We should not deify AI as it could go wrong just like any other technology," said former chief of China's securities regulator Xiao Gang, now a senior researcher at the China Finance 40 Forum.
"The point is how we make sure it is safe for use and include it with proper supervision," he told a forum in Qingdao.
Technology to regulate intelligent finance - referring to banking, securities and other financial products that employ technology such as facial recognition and big-data analysis to improve sales and investment returns - has largely lagged development, showed a report from the China Finance 40 Forum.
Evaluation of emerging technologies and industry-wide contingency plans should be fully considered, while the authorities should draft laws and regulations on privacy protection and data security, it showed.
Lessons should be learnt from the boom and bust of the online peer-to-peer (P2P) lending sector where regulations were not introduced quickly enough, said economics professor Huang Yiping at the National School of Development of Peking University.
China's P2P industry was once widely seen as an important source of credit, but has lately been undermined by pyramid-scheme scandals and absent bosses, sparking public anger as well as a broader government crackdown.
"Changes have to be made among policy makers," said Ms Zhang Chenghui, chief of the finance research bureau at the Development Research Centre of the State Council.
"We suggest regulation on intelligent finance to be written in to the 14th five-year plan of the country's development, and each financial regulator - including the central bank, banking and insurance regulators and the securities watchdog - should appoint its own chief technology officer to enhance supervision of the sector."
She also suggested the government bring together the data platforms of each financial regulatory body to better monitor potential risk and act quickly as problems arise. - REUTERS