"Keeping the righteousness and innovation" - financial technology is moving towards the 2.0 stage!

Introduction | Fintech has ushered in an explosive expansion period since 2014. After years of development, it has now entered a new stage of 2.0. In this issue, we have invited Wang Chao, Secretary General of the National Engineering Laboratory Financial Big Data Research Center and Tencent Cloud TVP teacher, to share with us the background of financial technology and the current situation of the industry, and take us to explore the financial industry from the perspective of combining technology and financial business. Future opportunities in technology.

About the Author

Wang Chao, Secretary General of the National Engineering Laboratory Financial Big Data Research Center, Tencent Cloud TVP. Mainly in the direction of financial big data, he is involved in applied research and preaching in financial cloud computing, Xinchuang, AI, audio and video, voice, and even blockchain, Internet of Things and other related technologies.

This article will share from four perspectives. The first is to analyze the real situation of financial technology development and the status quo of the industry from the background of financial technology. The second is from the perspective of technology, to see how technology promotes the development of the financial industry. Then, starting from the business scenario of finance itself, we will see how the financial scenario uses some related technologies to promote development. Finally, we will focus on sharing the opportunities that fintech faces.

1. Background: the development of financial technology and the status quo of the industry

my country's financial technology has entered the 2.0 stage, and the development needs of financial technology mainly come from three aspects: financial service demand, financial service supply and financial risk security. On the one hand, the inherent demands of financial technology development are growing, but on the other hand, they are also facing industry-specific financial pain points:

• Small, medium and micro financing, supply-side reform, carbon neutralization, rural revitalization, specialization, specialization, and other strategies;
• Unbalanced, shortage of financial services below county level, financial repression and financial disintermediation;
• Financial infrastructure is facing development challenges, and new technologies are developing, applying and securing.

From the perspectives of finance and technology, finance is an important scenario that drives the development of science and technology. At the same time, it is also a very important tool to support technology. Looking back at the entire process of fintech development, the history of fintech development is a process of gradually removing falsehoods and preserving truths, keeping upright and innovating. Since 2015, with the gradual standardization of financial technology and the formulation and improvement of relevant laws and regulations, the development of finance has been promoted. At the same time, the most core and essential advantages have been retained and absorbed by traditional financial institutions. The 2.0 era of fintech has truly begun.

Currently participating in the overall financial technology industry ecosystem, there are the following three main entities:

Financial technology market players: traditional financial institutions with a large amount of financial resources; financial technology companies that provide services such as IT, marketing, and risk control; technology Internet companies that only engage in advertising marketing, IT R&D, or software and hardware;
Fintech regulators: financial regulators; technology regulators; local financial regulators;
Fintech service institutions: Fintech investment and financing institutions; Fintech incubators; Fintech talent services.

Fintech has entered the 2.0 stage, and many changes have taken place. It is worth mentioning that the investment of financial institutions in technology has increased rapidly. Judging from the data in 2020, the four major banks, including financial institutions related to joint-stock banks, have invested more than 200 billion in IT, more than 30 billion in insurance, and more than 20 billion in securities, with an annual growth rate of more than 20%. rate continues to grow. On the other hand, the revenue of financial technology companies in Internet financial services has also maintained a rapid growth momentum. According to the Q1 and Q3 financial reports of Ant Group, its profits have reached more than 50 billion yuan. The above are all intuitive manifestations of financial technology in the process of development and innovation.

2. Technology: The application of technology promotes the development of the financial industry

The new generation of information technology of the current financial technology - referred to as "ABCDI". That is to say, artificial intelligence, big data, cloud computing, blockchain and the Internet of Things are five core technology directions. The technology of financial technology is generally combined and applied around these technologies.

A-Artificial Intelligence: The core of finance is risk control. Before the application of AI technology, the core of risk control is expert rules and scorecard models. The big data analysis brought about by the popularization of AI is currently reconstructing the core of financial risk control in all fields.
B-Big data: The scale of my country's digital economy accounts for 1/3 of the GDP. Data resources are another important national strategic resource after the three major resources of land, air and sea, and are regarded as "the oil of the new era". Big data is our fuel technology.
C-cloud computing technology: It provides infrastructure for computing, storage, and network resources. Users can obtain resources on the "cloud" at any time, use them according to demand, expand infinitely, and pay according to usage.
D-blockchain technology: It is a shared database with the characteristics of unforgeability, full traces, traceability, openness and transparency, and collective maintenance. It not only lays a solid foundation of trust, but also creates a new era of production relations.
I-Internet of Things technology: It can connect all items to the Internet through information sensing equipment such as radio frequency identification, infrared sensors, global positioning systems, laser scanners, etc., so as to realize intelligent identification, positioning and tracking of items. , monitor and manage the network.

If you make a simple layering of financial technology technology, you can refer to the division method of cloud computing, from the bottom IaaS layer to the middle PaaS+DaaS layer, and then to the top SaaS layer.

At the IaaS level, most financial institutions will choose private cloud, and a small number of financial institutions will choose industry cloud. At present, only securities, insurance, and some local finance may involve the use of public cloud financial cloud, because the financial protection of data security is very strong, and the default concept in the financial industry is that financial data does not travel.

At the PaaS level, various banks and companies are making applications around various middle platforms, such as: data middle stations, AI middle stations, technology middle stations, application middle stations and other related fields, and a large number of applications are being carried out. Fintech companies in many industries are also committed to providing such data middle-office construction services and data-related services.

At the SaaS level, large banks, including joint-stock banks, have made great progress in mini-programs, APPs, including PC-side technologies. For example, China Merchants Bank Credit Card, UnionPay Cloud QuickPass and other related APPs are technically not small. breakthrough. The financial industry has carried out in-depth learning from the Internet industry, and a large number of talents from the Internet side have entered the financial institution side.

Specific to the typical technical use cases of fintech, there are also very detailed technical directions:

• Artificial intelligence: Machine learning algorithms are widely used in stock market forecasting, risk assessment and early warning, transaction anti-fraud and other scenarios; knowledge graphs are more advanced in mining potential customers and early warning of potential risks; computer vision is used in identity verification and mobile payment. sought after.
• Big data: The data center of financial institutions has basically been built, and has a wide range of use cases in data access, data storage, data computing, data analysis, etc.
• Financial cloud computing / Xinchuang: The first and second phases of the financial Xinchuang pilot have obvious effects, and they have begun to be fully promoted in existing institutions.
• Blockchain: A more representative use case is the central bank’s digital renminbi; in addition, the blockchain builds a decentralized trust foundation, which can store certificates in the blockchain, open up databases, and develop the supply chain financial industry. supported.
• Federated learning: Compared with traditional methods, federated learning technology brings more stringent privacy protection and provides great convenience in the security and compliance of data usage.
• RPA: Intelligent RPA greatly improves work efficiency, reducing the whole process from 4 hours to 10 minutes.

3. Scenario: business runs through financial technology practice

After introducing the representative technologies of fintech, let’s take a deeper look at typical scenarios in the field of fintech combined with practice.

The first is the establishment of a data middle station, which provides a full-featured middle station capability for data acquisition, data storage, data analysis, data security protection, etc. Functional organization construction and other aspects have provided strong support to help business leaders make better decisions.

The second is the operation of digital intelligence. Through user portraits, data analysis and modeling, and accurate delivery, the conversion rate of each link of marketing is improved, and the user experience is also improved. Many banks require data not to travel, so it cannot obtain the data of tagged users as quickly as Internet companies. And we will try to use private computing or data exchange to ensure that both the purpose of precise marketing and precise operation can be achieved, and the data cannot be obtained by third parties.

The third is big data risk control, which realizes the establishment of the underlying label library, the building of models layer by layer, and finally the implementation of the decision engine to help business compliance.

In addition, digital currency, small and micro finance, industrial finance, policy finance, financial supervision, smart outlets, etc., there are also increasingly mature scenario-based practical cases of financial technology. The development of these financial scenarios is inseparable from the overall concept of big data risk control.

4. Opportunities: Fintech ushered in new development

This year, the People's Bank of China issued the "Fintech Development Plan (2022-2025)", which mentioned eight key tasks, including improving financial technology governance, fully releasing the potential of data elements, building new digital infrastructure, and deepening the application of key core technologies. With this as a background, we will analyze the scenarios that may be involved and explore new opportunities in the new era of financial technology.

The first is financial digital transformation consulting, the way of financial digital transformation, how to build enterprise structure, how to improve data collection, analysis, governance, how to innovate information technology and other key directions, all of which require a lot of consulting and services to support.

The second is talent training. The financial industry has established technology subsidiaries one after another. In the process of deepening the digital transformation, the shortage of high-quality personnel on the supply side is very serious, which has led to an increasing call for talent training in the industry.

The third is financial cloud computing and Xinchuang, which brings more opportunities for domestic cloud computing and Xinchuang enterprises. Whether it is for some lists that have already entered the Xinchuang catalogue or for companies that are about to enter, some standards and derivations are provided, and the adaptation of Financial Xinchuang is in progress.

In addition, the operation and risk control of financial technology, and regulatory compliance are also classic opportunities. With the improvement of network security laws and regulations, data governance and security in the field of financial technology will also usher in more opportunities and development. For example, for the management of fintech ethics and other related management, including consumer protection, this side needs to have a regulatory system. The process of establishing a compliance system on the financial institution side will trigger a large number of financial technology demands.

Finally, in terms of financial data governance and overall data security, how to build data management and standards, how to build a platform, and how to ensure both data security and data application, these topics will also usher in great opportunities and development.