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The Involvement of Large Internet Enterprises in Financial Sectors: A Comparative Study of the China and America Experience (No.217, 2021)


By Zhang Liping & Cao Shengxi, Research Institute of Finance, DRC

Research Report, No.217, 2021 (Total 6282) 2021-8-11

Abstract: From the global perspective, large internet enterprises are playing an increasingly important role in the financial field with their powerful data acquisition and analysis capabilities, in which the performance of enterprises of China and the U.S. stand out. However, the involvement of large internet enterprises in the U.S. in the financial field was earlier and is now developing steadily. In comparison, China’s enterprises involved a litter bit late while in a fast and in-depth fashion. The differences are deeply related to the diversities in the two countries’ financial development, the scenarios of fin-tech application, supervision concepts and systems, and the development orientation of large internet companies. At the initial stage, the fast and in-depth involvement of China’s large internet enterprises in the financial sector directly promoted financial innovation, and made financial institutions fully aware of the importance of technology in improving the efficiency of financial services, which has also brought some risks that cannot be ignored. In the future, the involvement of large internet enterprises in the financial field will continue with the upsurging digital economy. And with the aim of giving better play to the role of large internet enterprises in empowering the financial sector, this paper has proposed the following policy options by drawing the practical experience of the U.S.. First, the financial supervision in terms of consumer protection and anti-data-monopoly over large internet enterprises needs to be strengthened by vigorously improving the service capabilities and quality of licensed financial institutions. Second, work needs to be done to encourage the large internet enterprises to engage in both cutting-edge and basic technological innovations so as to strive for a steady and long-term development of their involvement.

Keywords: large internet enterprises, financial sector, fin-tech