2020 is a very difficult year for everyone, and it is also a year of great changes in financial technology - online finance has entered the era of strong supervision, the prototype of the financial technology regulatory framework has emerged, and banks have launched a distributed The wave of core construction, the emergence of the king of blockchain, and 5G have become the "barbarians" at the door of the financial industry.
Let us look back on 2020, summarize the highlights and failures of financial technology, and look forward to 2021 of financial technology.
Online finance, strong supervision is coming
Starting from 2020, Internet loans, supply chain financial loans, online small loans, Internet insurance, and the wealth management agency business of wealth management subsidiaries have all been subject to Strictly restricted.
On July 17, 2020, the China Banking and Insurance Regulatory Commission issued the "Interim Measures for the Administration of Internet Loans of Commercial Banks", which clarified that commercial banks shall not provide funds in any form for cooperative institutions without lending business qualifications. Loans are not allowed to be jointly funded and extended with cooperative institutions that do not have the qualifications for lending business. Core risk control links such as Internet loan credit approval and contract signing should be independently and effectively carried out by commercial banks. Commercial banks are not allowed to entrust cooperative institutions with full authority to verify the identity of Internet loan borrowers.
On September 23, 2020, the People's Bank of China, the Ministry of Industry and Information Technology, the Ministry of Justice, the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, and the State Administration of Foreign Exchange jointly issued the "About Standardizing the Development of Supply Chains" "Opinions on Financial Support for the Stable Cycle and Optimization and Upgrading of the Supply Chain Industrial Chain" clearly stipulates that financial services shall not be carried out without a license or beyond the business scope specified in the license; various third-party supply chain platform companies shall not carry out disguised operations in the name of supply chain finance. financial business. Supply chain loans without operating licenses will be hit in the future.
On November 2, 2020, the China Banking and Insurance Regulatory Commission and the People's Bank of China jointly issued the "Interim Measures for the Management of Online Small Loan Business (Draft for Comment)", suspending the operation of online small loans. For cross-regional business, the requirements are unified with the registration place of the traffic platform. It is clarified that the capital contribution ratio of online small loan companies in joint loans shall not be less than 30%, the upper limit of single-family loan balance of 1 million is clarified, and the control of cross-regional online small loan companies is restricted. Quantity increases capital requirements.
On December 14, 2020, the China Banking and Insurance Regulatory Commission issued and implemented the "Internet Insurance Business Supervision Measures", which clearly stipulates that non-insurance institutions are not allowed to carry out Internet insurance business. The Internet insurance business includes: first, providing insurance product consulting services; second, comparing insurance products, premium calculations, and quotation comparisons; third, designing insurance plans for policyholders; fourth, handling insurance procedures; and fifth, collecting premiums. In stark contrast, on May 2, 2020, the China Banking and Insurance Regulatory Commission issued the "Guiding Opinions on Promoting the Online Development of Property Insurance Business", requiring that by 2022, auto insurance, agricultural insurance, accident insurance, short-term health insurance, The online rate of business areas such as property and casualty insurance has reached over 80%.
On December 24, 2020, a banking and insurance regulatory bureau in East China issued the "Notice on Further Regulating Certain Issues in the Deposit Market within its Jurisdiction". The notice shows that the bureau clearly requires all types of banking institutions within its jurisdiction not to accept deposits through third-party Internet platforms or cooperation with other third-party intermediaries. If cooperation has already been carried out, relevant deposit products will be removed from the shelves and cooperation will be terminated with immediate effect. Third-party Internet platforms will not be able to do deposit business in the future, and banking institutions must also take precautions and develop deposit channels other than Internet platforms.
On December 25, 2020, the China Banking and Insurance Regulatory Commission issued the "Interim Measures for the Management of Sales of Wealth Management Products of Wealth Management Subsidiaries of Commercial Banks (Draft for Comments)", which clearly stipulates that without the permission of the financial regulatory authorities, any non-financial institution Individuals are not allowed to sell financial products directly or as agents in disguised form. Then, those Internet platforms and industrial chain platforms that are not licensed by the financial regulatory authorities cannot sell financial products to external parties.
In an environment of strong supervision of online finance, supervision encourages financial institutions to develop their own online channels, but external online channels will be depressed. It’s time for licensed financial institutions to “break up, give up, and leave” and give up the strategy of only providing funds and relying on Internet channels to quickly increase volume. Roll up your sleeves, work hard, build your own characteristic scenes, integrate into the industrial chain, "strengthen the stronghold and fight stupid battles", create your own brand financial products, and provide your financial consumers with localized, differentiated, and Scenario services that can continue to promote stickiness are the right path. There may be a trend in the future. Financial institutions will begin to develop non-financial businesses. People from banks will start selling vegetables to farmers, people from insurance will start doing health technology, and people from Pay will start doing catering takeout. In the future, financial institutions may recruit people. There is no need to understand finance. Those who understand agriculture, logistics, biotechnology, etc. may be more popular.
Fintech, the regulatory framework is emerging
2020 is a year of intensive introduction of fintech regulatory measures, including fintech development indicators, fintech regulatory sandbox, and the National Fintech Certification Center , the National Financial Technology Risk Monitoring Center were all settled within this year. In the future, financial technology products must pass certification, be fully tested in regulatory sandboxes, and be monitored by risk detection centers before they can provide services to financial institutions. It can be said that it is not easy.
In October 2020, the People's Bank of China released the "Financial Technology Development Indicators" standard, which covers strategic planning, organizational structure, financial technology capital and talent investment, online intelligent services, risk control capabilities, Fintech development indicators are elaborated on patents, software copyrights, fintech applications and outputs, etc., which is of far-reaching significance for the statistical and quantitative assessment of fintech achievements of financial institutions.
In 2020, the People's Bank of China announced 64 financial technology regulatory sandbox projects in 9 places. Beijing focuses on AI and blockchain, Shenzhen, Xiongan New Area, and Suzhou focus on the pilot program of digital renminbi; Chongqing focuses on risk control technology for the promotion of small and micro financial technology and rural finance; Shanghai focuses on blockchain and big data-based Industrial chain financial risk control technology promotes the integration of finance, industrial chain and digital government affairs; Hangzhou focuses on big data, blockchain and distributed ledger technology; Guangzhou focuses on cross-border financial service security and small and micro financial risk control. This is because Guangdong has many foreign trade financial services and many small and micro enterprises in the manufacturing industry.
These nine regions are basically first-tier cities and are also the most economically developed and active places in China. Setting up financial technology regulatory sandboxes in these places will help combine the industrial chain and social ecology of the local economy. It will help to make good experiments to promote better integration of finance into the real economy. In addition, there are many financial technology companies in these places, which can provide more technical support and experimental samples for the financial technology regulatory sandbox. For further pilot projects, firstly, we must consider the sense of gain of small and micro enterprise customers. Whether the perception is strong or not is one of the evaluation criteria. It cannot be just pilot projects by financial institutions and financial technology companies. We must understand how customers feel about the pilot; secondly, we must promote finance, scenarios, and industries. The integration of chains has always been a big issue in the financial industry. Supervision can encourage financial institutions to deepen the integration with the industrial chain through financial technologies such as the Internet of Things, biometrics and AI, and promote the depth and breadth of integration, and promote the true coverage of financial industries. The entire chain of chain finance.
On October 13, 2020, Chongqing National Fintech Certification Center Co., Ltd. was established in Chongqing. The center will rely on the fintech product certification system uniformly implemented by the country to build the core competitiveness of fintech certification and build A first-class authoritative and professional certification agency has become the backbone of my country's financial technology pluralistic governance system.
On October 23, 2020, at a special policy release event at the 2020 Financial Street Forum Annual Meeting, Mo Wangui, deputy director of the Financial Research Institute of the People's Bank of China, said that the central bank will establish a national financial technology risk monitoring in Beijing Center, in the future financial technology risks will be included in the unified monitoring of the country.
Judging from the above information, the regulatory framework for financial technology will be very strict in the future, which is the same as the classification and classification monitoring of loans, all at the micro level.
Financial cloud, wave of distributed core construction
China Banking and Insurance Regulatory Commission issued the "Regulatory Guidance Opinions on China's Banking Industry Information Technology "13th Five-Year Plan" Development Plan (Draft for Comment)" ( (hereinafter referred to as the "Draft for Comments"), was released for public comment on July 15, 2016. The "Draft for Comments" points out: Actively carry out cloud computing architecture planning and proactively and steadily implement architecture migration. The "Draft for Comments" requires: By the end of the "Thirteenth Five-Year Plan", all important information systems for Internet scenarios will be migrated to cloud computing architecture platforms, and the migration ratio of other systems will not be less than 60.
In addition to the above "Draft for Comments", the central bank re-released three financial cloud-related standards in 2020, providing clear and specific guidance for the construction of financial clouds. On October 16, 2020, the People's Bank of China released the "Technical Framework for Financial Application Specifications of Cloud Computing Technology" (JR/T0166-2020), "Security Technical Requirements for Financial Application Specifications of Cloud Computing Technology" (JR/T0167-2020), "Cloud Computing Technology Financial Application Specifications Technical Framework" (JR/T0167-2020), Three financial industry standards including "Computing Technology Financial Application Standards for Disaster Recovery" (JR/T 0168-2020), combined with the operating mechanism and risk characteristics of the financial cloud, cover basic capabilities, network security, data protection, operating environment security, and business continuity. Targeted technical requirements have been put forward in terms of security and other aspects.
2020 is the last year of the 13th Five-Year Plan, and the pressure on financial institutions to build financial cloud systems has doubled. Most banks choose distributed core systems as the starting point for building financial clouds, but the specific ideas are different:
Some banks that have been established for a long time will not transfer all the bank's business at once As for distributed systems, we should start from wealth management, credit card business and Internet channels to build distributed database systems. This will have less impact and can be gradually piloted and gradually promoted.
In 2020, the ICBC corporate (legal person) financial management system completed the transformation from a mainframe to a distributed architecture based on a distributed database.
In 2020, China Everbright Bank independently developed the POIN microservice system and promoted the container cloud platform. The cloud adoption rate of the bank's application system was 87.5%. China Everbright Bank also launched a distributed database system for a new generation of wealth management platform based on TiDB. .
GoldenDB, a distributed database jointly developed by China CITIC Bank and ZTE, has been launched on CITIC Bank’s new credit card core, supporting 80 million credit card users with an average daily transaction amount of RMB 9 billion and passing the 4,500 TPS stress test.
Recently established private banks, because of their small historical burden, can build a distributed core system that integrates online and offline from a high starting point to develop online deposit and loan business and offline business based on financial technology. Online integrated membership development provides strong support.
Suning Bank, the first private bank in Jiangsu, is positioned as a technology-driven O2O bank. It took 2 years to build. In 2020, it launched the industry's first independently developed online and offline integrated distributed core system." The clouds are opening.” "Yunkai" is based on the distributed architecture of "Suning Cloud" and effectively integrates the bank's online and offline core business processing into one system, solving the "user data fragmentation" and "R&D" problems caused by traditional banks' online and offline dual cores. "High operation and maintenance costs", "not supporting high concurrent transactions", "slow product development and delivery" and other serious problems, the system has carried the daily processing of 25 million users and 3 million accounts of Suning Bank, with 1.5 million transactions per day.
But do financial institutions really need a distributed architecture? If it is just a traditional business, a traditional database is actually enough. The normal TPS of some banks does not reach the scale of thousands or even tens of thousands.
However, banks always have to do some things when transforming into the Internet. If they can reduce IT costs, improve the agility of business demand response, and optimize the system architecture, it will be beneficial.
At present, the financial industry still uses cloud computing capabilities such as distributed databases, middleware, and virtualization at a lower technical level. Many of our manufacturers prefer integrating other people’s solutions and open source code to master There are fewer contributors to core native technologies, and there is a lack of globally influential cloud computing core technologies.
The leading cloud computing companies in the industry have made major breakthroughs in core technologies. OpenStack, a cloud computing open source project initiated by NASA and Rackspace, released the 21st version of the platform (codenamed Ussuri) in 2020, including Ironic that supports bare financial hardware configuration, Kolla that supports containerized deployment, and Kunyr that supports IPV6 communication between containers. , Octavia supports edge environment load balancing. In 2020, Red Hat released CRI-O, a new container runtime technology for K8S that replaced Docker, setting off a new wave in the container market. IBM released the IBM financial services public cloud based on the high availability service of IBM Z server, Promontory compliance technology, and OpenShift container platform. Promontory supports anti-money laundering, sanctions, anti-corruption, privacy and data protection, network and information security in terms of compliance. , consumer protection and other services, which are very suitable for the needs of financial institutions. Suning Financial Technology also recently released mPaaS, a mobile development DevOps platform that took ten years to build, supporting the rapid construction and generation of online financial APPs, including a set of client native frameworks and component libraries: 3 major R&D frameworks, more than 20 Basic technology components, more than 30 functional components; a mobile middle platform: providing support for the entire life cycle of R&D, testing, release, analysis, and operation; supporting cross-platform, enabling the development of multiple terminals at once, and supporting multi-channel precision marketing and operations.
Blockchain, the king is now
Blockchain technology progress in 2020 will develop towards protecting privacy and improving efficiency. Bitcoin focuses on improving privacy protection and smart contract capabilities in the following three aspects, namely Schnorr signature, an aggregated signature technology that protects privacy, Taproot, a smart contract solution that improves Bitcoin privacy, and Taproot, which can expand the flexibility and scalability of Bitcoin smart contracts. Merkle abstract syntax tree MAST. Multi-part payment technology (multi-part payment) began to appear on the Lightning Network, which divided the sent funds into smaller amounts and reached the recipient through Lightning nodes. This already had the prototype of TCP/IP and distributed finance, but Lightning The network also faces challenges from Ethereum’s DeFi system WBTC. Ethereum 2.0 (ETH2) was launched on December 1, 2020. Ethereum 2.0 has two major upgrades. One is from PoW (Proof of Work) to PoS (Proof of Stake). Constructing blocks through validators and depositing Ethereum can save electricity; second, deploying Shard Chains can greatly increase the throughput of Ethereum to 100,000 TPS. Fabric 2.0 implements decentralized management of smart contracts, CouchDB adds a state database cache to improve reading efficiency, and uses Alpine Linux to package Docker images to reduce space usage.
In terms of blockchain applications, several milestones have been reached:
The unit price of Bitcoin exceeded US$32,000, and Bitcoin’s share of the market value of cryptocurrency exceeded 70%. Ranked 20th in the market value rankings, reaching 499 billion U.S. dollars, it has become the world’s largest “financial institution” in terms of market value, surpassing VISA with 480 billion U.S. dollars;
China’s central bank’s digital renminbi has passed the red envelope and retail payment methods are piloted in Shenzhen and Suzhou, supporting multiple payment methods such as offline wallet offline QR code payment, offline "touch and touch" payment and e-commerce online payment;
Single quarter PayPal, with a transaction volume of US$247 billion, announced that it supports Bitcoin transactions;
DBS Bank, Singapore’s largest commercial bank, launched a digital trading platform based on blockchain technology to provide digital asset tokenization (unlisted Digital tokens supported by the company's stocks, bonds and private equity funds), digital currency transactions (mutual exchange of Bitcoin, Ethereum, Bitcoin Cash, Ripple and Singapore dollars, US dollars, Hong Kong dollars, Japanese yen) and digital asset custody ecosystem System (digital asset encryption key);
Distributed application DAPP and distributed market DeMa have heavyweight applications, such as Hyperion Map, etc.
Blockchain technology is accelerating its maturity and practicality, and it has become the king. There is no doubt that it will become the cornerstone technology of the future digital world. Blockchain is making rapid progress in building a distributed financial Internet, distributed markets, and distributed applications. There will soon be killer applications other than Bitcoin in the future.
5G, the "barbarian" at the door of the financial industry
Finance has stayed in the mobile Internet era for too long, and mobile financial APPs have now made consumers tired. Most of the current scene finance has nothing new, nothing more than basic services such as electronic accounts, loans, and settlements. 5G is a mutant technology that may bring major changes to financial services. Currently, the number of global mobile communication users is 5.6 billion. In the future, there will be a new 5G financial form, but it is still in its infancy.
The core technologies of 5G include spectrum sharing, carrier aggregation, massive MIMO, fixed wireless access, and network slicing. The 5G data transmission rate can reach up to 10Gbit/s, and the user experience rate reaches 100Mbit/s, which is 100 times faster than 4G LTE. 5G network latency is extremely low, less than 1 millisecond, and 5G is 30-70 milliseconds. 5G supports ultra-large network capacity and provides connection capabilities for hundreds of billions of devices. Network slicing enables virtualization of network resources.
5G messaging is based on the GSMARCS standard and supports multimedia formats such as text, pictures, audio and video, and supports interactive messages between individuals, as well as interactive messages between industry customers and individuals. 5G messages can be perfectly integrated with mobile phone address books and can ensure personal identity identification based on the operator's massive real-name information. 5G messages are part of the mobile phone protocol stack. Unlike WeChat, users can use 5G messages without downloading the APP.
The current application of 5G in banks is still relatively shallow. For example, CCB mainly applies 5G in smart branches, such as financial space capsules, smart homes, shared space live broadcasts, customer growth interactions, security monitoring, etc. ICBC has launched a 5G messaging service on a pilot basis for some customers, allowing them to handle banking services on the SMS page, covering more than 20 application scenarios such as investment and financial management, card application, loans, payment, smart customer service, and branch reservations. ICBC customers can complete business processing without downloading the APP or opening WeChat. Minsheng Bank focuses on providing APP-side service voice navigation through 5G, and also provides life encyclopedia-style content services such as wealth lectures, financial knowledge, children's education, health lectures, tax explanations, etc. Minsheng Bank also provides account information instant messaging and large-amount payment through 5G. Services such as transfers, card activation, password management, and asset certificate issuance.
The traditional insurance loss assessment and claims settlement process is relatively cumbersome. Although it has been optimized, it still takes up to 2 hours from taking photos to contacting the claims specialist, and the car owner needs to make 7 or 8 calls to complete the claim. . ZhongAn has launched the "Pay Now" online car insurance claim settlement process, which allows you to go through the entire process from reporting a case, investigation, damage assessment, document presentation, settlement to claim verification and settlement in one video call, and you can place your payment in as little as 2 minutes. The Ping An Good Car Owner APP has launched "Trust Compensation". As long as the car owner uploads the accident photos to the APP, the car owner can drive away from the scene and receive the claim within 3 minutes.
Operators have the deepest control over the 5G ecosystem, and many operators now have financial licenses and financial technology companies. 5G is a typical representative of generational technology. The rise of a generational technology will definitely be accompanied by the re-division of power territory. From the current point of view, 5G messaging is already on the way to subvert WeChat. Multimedia messaging, social networking, video and live broadcasts no longer require independent APPs. Moreover, mobile operators have a large amount of real-name user information, and customers in the 5G era do not need it at all. Bank APP can handle financial services. If the past ten years were the era of e-commerce finance, then the next ten years may be the era of 5G finance. 5G is the "barbarian" at the door of the financial industry.
Looking forward to what financial technology will look like in 2021
Financial technology will change the shape of the financial industry faster than we can imagine.
Pure online risk control will become history, and offline IoT technology will accelerate the integration with online risk control to form an online and offline risk control system, accelerating the integration of the physical world into the digital world, and the current IoT chattel Staking, smart helmet due diligence, and satellite micro-risk control are all examples; with the strong support of the global blockchain community, the performance/privacy optimization of blockchains such as Bitcoin, Ethereum 2.0, and FABRIC will continue firmly. Distributed financial transmission technology will accelerate development and develop simultaneously with cross-chain/side-chain and other ecological technologies. It will accelerate the formation of a distributed financial Internet ecosystem based on the Internet world, streamline all financial intermediaries and intermediaries, and return finance to the origin of value; 5G will begin to replace existing financial service channels such as web pages, APPs, WeChat and mini-programs on a large scale, and will also make financial interactions between machines and people, and even machines and machines possible.
The green mountains cannot cover it, after all, it flows eastward
This change must have different answers from different perspectives. Here is the answer from the perspective of finance. Many banks have established financial technology companies one after another. It is obvious that "finance" and "technology" are a future development trend.
Let’s first clarify the actual connotation of “financial technology” in our country. Specifically, the current focus of my country's development of financial technology is mainly in the subdivision of "market infrastructure services", with more emphasis on the assisting, supporting and optimizing role of various cutting-edge technologies in licensed and compliant financial businesses. The application of technology always revolves around the inherent laws and regulatory requirements of "finance".
This time in the field of financial technology, so many banks have entered one after another, which shows that financial technology has been elevated to strategic considerations and core competitiveness by many traditional financial institutions. Changes are inevitable, requiring these traditional banks to make all-round improvements in processes, products, risk control, operations, scenarios and other fields, and require technology to expand their boundaries. At the same time, the current Internet giants still control multiple scenarios such as e-commerce shopping and social networking operations. It is relatively difficult for banks to carve out a way out alone. Therefore, cross-industry and cross-regional cooperation in the field of financial technology naturally arises, and will also be the case in the future. An effective way out for many small and medium-sized banks is to adopt specialization and localization. Technology does technology things well, and finance does financial things well. They are linked to each other and jointly provide customers with open and experiential financial services.
In my opinion, due to the overtaking curve in the development of the Internet in the past few years, my country's digital technology is relatively strong, and it is currently in a dominant position in the global financial technology field. However, in actual economic operations, many fields are not fully served by financial technology. This is a current contradiction. Therefore, the participation of banks, a financial institution that represents the will of the country, can further catalyze the rapid transformation of the financial technology industry.
This is an irreversible trend. It is not that banks want to do this, but the times are pushing banks to do this:
First, mutual financial companies have taught banks a lesson, finance can still be like this To play, the cost is lower and the profit is better. In the past, banks only targeted and served high-quality customers to maximize profits. Later, they found that customers other than so-called high-quality customers were more profitable.
Second, traditional banks, whether they are branches of several levels or community banks, are actually very costly due to geographical restrictions. On the one hand, supervision costs and on the other hand, are not directly proportional to profits. However, the Internet The lower the cost of the platform's audience across the country, the relative profit is even more optimistic!
Third, banks’ traditional marketing models are gradually losing their effectiveness. Radio and outdoor media used to be very effective, but now they are getting worse and worse, and they are forced to transform and innovate!