On 30 December 2022, the CBIRC issued its Banking and Insurance Institution Consumer Rights and Interests Protection Administrative Measures’ (银行保险机构消费者权益保护管理办法), which are set to come into effect starting with 1 March 2023.
According to the CBIRC, the new rules are for the purpose of ‘maintaining a fair and just financial market environment, pragmatically protecting the lawful rights and interests of banking and insurance sector consumers, and expediting the healthy and high-quality development of the sector’.
Key amendments of the new rules include requiring that banks and insurers include the protection of consumer rights and interests in their corporate governance, enterprise culture and business development strategies, and establishing work mechanisms for inspecting the protection of consumer rights and interests, management and control of cooperative institutions, and the conduct of internal inspections.
China is seen as a force in digital payments and ecommerce, driven by big retail players such as Alibaba. However, what is the state of the banking system in China, in terms of innovation and openness?
The majority of China-based banks are owned and led by the state. In this MioTech article from 2019, it is pointed out that fintechs overpower banks in terms of user experience and marketing and operations efficiency. There isn’t a strong regulatory movement pushing for Open Banking and Open Finance in China on behalf of banks. However, companies like Tencent and Alibaba through their products WeChat and AliPay led to the creation of super apps, filled with digital services, a DigFin analysis shows..
Tencent went on to create WeBank, a digital bank that appeals to the needs of more than 200 million customers. Chinese regulators recently took to regulating fintech activity and Alibaba’s fintech arm – Ant Group – stopped whitelabbeling its platform to banks and instead accepted to follow financial institution rules. In other words, one can deduce that Open Banking in China is a market-driven initiative, with banks left in the shadow of fintech super apps that have the numbers in terms of users and can appeal to multiple digital needs, including financial solutions.
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