To thoroughly implement the guidelines of the third plenary session of the 20th Communist Party of China Central Committee and the Central Financial Work Conference, and to develop digital finance, the People’s Bank of China (PBOC), together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the National Financial Regulatory Administration, the China Securities Regulatory Commission, the National Data Administration and the State Administration of Foreign Exchange, recently unveiled the Action Plan for Promoting High-Quality Development of Digital Finance (hereinafter referred to as the Action Plan).
Under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Action Plan is firmly committed to the fundamental objective of providing financial services for the real economy and the people-centered philosophy of development. Driven by data elements and digital technologies, the Action Plan focuses on accelerating the digital transformation of financial institutions, consolidating the foundation for the development of digital finance, improving the governance system for digital finance, and supporting financial institutions in using digital technology to improve the quality and efficiency of services in technology finance, green finance, inclusive finance, old-age finance and digital finance, thereby promoting the high-quality development of China’s digital economy.
The Action Plan proposes to systematically expedite the digital transformation of financial institutions, strengthen strategic planning and organizational management, enhance the capability to support digital technology, consolidate the foundation of data governance and integrated application capabilities, build a service ecosystem for digital finance, and improve digital operation and management capabilities. It will promote the application of digital technology in such service areas as technology finance, green finance, inclusive finance, old-age finance, and digital real integration by innovating financial products and service models, thus improving the quality and efficiency of financial services in key areas. The Action Plan also proposes to consolidate the foundation for the development of digital finance by creating an efficient and secure payment environment, fostering a high-quality financial data market, and strengthening the development of emerging infrastructure related to digital finance. Work will be done to improve the governance system for digital finance, strengthen risk prevention in this regard, enhance data and network security protection, heighten supervision of digital financial services, enhance digitalization in financial regulation and improve the protection mechanism for financial consumers.
Moving forward, the PBOC will establish a work linkage mechanism with relevant authorities, strengthen policy coordination and information sharing, develop a sound digital financial statistics, monitoring and evaluation system, summarize and promote useful experiences and exemplary models, and promote the implementation of measures stipulated in the Action Plan. Also, it will work to make effective progress in digital finance, accelerate efforts to build China into a financial powerhouse, and consolidate and expand China’s advantages in digital economy.
Notice of the PBOC, NDRC, MIIT, NFRA, CSRC, NDA and SAFE on Issuing the Action Plan for Promoting High-Quality Development of Digital Finance
Promoting the major area of digital finance, accelerating the digital transformation of the financial sector, and providing high-quality services for the digital economy while promoting the integration of digital and real economies are of great significance for building China into a financial powerhouse and consolidating and expanding China’s advantages in digital economy. The Action Plan for Promoting High-Quality Development of Digital Finance was formulated to thoroughly implement the decisions and arrangements made at the third plenary session of the 20th Communist Party of China Central Committee and the Central Financial Work Conference, and promote the high-quality development of digital finance.
I. General Requirements
(1) Guiding Principles. Under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Action Plan will apply the new development philosophy fully, faithfully, and comprehensively. It is firmly committed to the fundamental objective of providing financial services for the real economy and the people-centered philosophy of development, seizing opportunities while prioritizing safety. Driven by data elements and digital technologies, the Action Plan focuses on accelerating the digital transformation of financial institutions, enhancing the convenience and competitiveness of financial services, and maintaining traditional financial service methods such as necessary cash transactions. It aims to improve the digital finance governance system, strengthen digital supervision capabilities, and enhance financial consumer protection. The Action Plan will actively and prudently promote the e-CNY, contribute to building China into a financial powerhouse, and help China’s digital economy grow bigger, better, and stronger.
(2) Work Objectives. As of end-2027, a financial system highly compatible with the development of the digital economy will be essentially established. The digital transformation of financial institutions will achieve significant results, with notably enhanced digital operation and management capabilities. A favorable environment will be created for the coordinated development of digital finance, technology finance, green finance, inclusive finance, and old-age finance. The adaptability and inclusiveness of digital financial products and services in major strategies, key areas, and weak links will be significantly improved. The governance system for digital finance will be initially established, digital financial infrastructure will be basically in place, and related financial management and supporting institutional mechanisms will be further improved.
II. Systematically Promoting the Digital Transformation of Financial Institutions
(3) Strengthening Strategic Planning and Organizational Management. Financial institutions will be guided to develop comprehensive strategic plans for digital transformation, specifying target pathways and implementation strategies. A system that “top leader taking responsibility” and a coordinated mechanism for digital transformation will be established, with leading departments designated, financial support ensured, and the pace of digital transformation accelerated. A sound operational management mechanism will be built to support intelligent and data-driven decision-making across strategies, operations, and innovation. Additionally, an evaluation system for the effectiveness of digital transformation will be introduced, along with improvements to the incentive and assessment mechanisms.
(4) Enhancing the Capability to Support Digital Technology. PBOC and relevant authorities will reasonably assess the progress of financial institutions’ digitalization, guide capable financial institutions to establish task-oriented teams that integrate technology and business departments, and develop a demand-driven digital technology development model led by front-end business departments to enhance agile responsiveness in technology development. The strategy of technological self-reliance will be implemented, research on cutting-edge technologies will be conducted, the patent layout in key areas will be accelerated, and the independence and controllability of core technological systems will be continuously improved. A digital public service platform for the securities and futures industry will be built to provide data and technological support for the digital transformation of financial institutions.
(5) Strengthening the Foundation for Data Governance and Integrated Application Capabilities. Financial institutions will be guided to improve their data governance systems, enhance data governance systems and data quality control mechanisms, and actively participate in the evaluation of implementing the national Data Management Capability Maturity Model (DCMM). Data asset accumulation will be strengthened, and internal and external data will be comprehensively integrated to achieve unified management and integrated sharing of all data domains. In addition, capabilities in data mining, analysis, and visualization will be enhanced to provide foundational data support for business operation, risk management, and internal control. “Data element ×” pilot projects in the financial sector will be promoted, leveraging big data, privacy computing, and other technological means to integrate multi-dimensional data. Moreover, financial products and risk control models will be optimized to improve the quality and efficiency of financial services and risk management.
(6) Building a Digital Financial Service Ecosystem. Financial institutions will be encouraged to rationally plan and develop digital ecosystem scenarios and establish digital ecosystem operation systems. Adhering to the people-centered approach and aiming to serve the public, a retail digital financial ecosystem is to be established. On the basis of sound financial consumer suitability management, the accessibility and inclusiveness of financial products and services will be effectively improved. Additionally, PBOC and other authorities will support financial institutions in participating in the development of digital government, helping enhance government management and service levels. They will promote the digital transformation of regional equity markets and accelerate the integration and application of data resources, as well as facilitate the regulated development of internet insurance and enhance online underwriting and claims capabilities.
(7) Improving Digital Operation and Management Capabilities. Financial institutions will be supported in improving their data-driven capabilities for business decision-making and resource allocation, and leverage digital tools such as process automation robots, digital client marketing engagement tools, and centralized operational models to empower operationally intensive roles, thus enhancing both quality and efficiency in this regard. Sound mechanisms for the training, selection, and utilization of digital talents will be established, and the digital assessment and incentive mechanisms for human resources will be improved. Digital technologies will be used to optimize risk management systems, enabling intelligent risk warning and dynamic detection, and the shift of risk control from “manual prevention” methods to “technology and intelligent prevention” strategies is to be promoted. Local governments will be encouraged, where conditions permit, to support small- and medium-sized financial institutions that have the capability and willingness to explore distinctive models of digital transformation, based on their business orientation. Priority will be given to business areas or processes with deep influence, broad coverage, and high value, ensuring that the transformation is cost-effective and the business is sustainable.
III. Using Digital Technologies to Enhance the Quality and Efficiency of Financial Services in Key Areas
(8) Improving the Quality and Efficiency of Technology Finance. Financial institutions will be encouraged to fully leverage internal and external data as well as big data technologies to create a holistic picture of technology enterprises. This will enhance client filtering and marketing efficiency, extending financial services to more enterprises in their early stage of development or in growth stage. Financial institutions are to be supported in utilizing “tech-flow” information, such as the innovation points system and evaluation indicators for high-quality development of specialized, sophisticated, distinctive and innovative companies, to improve capabilities for assessing the risks of technology-based companies through digital means. Risk monitoring models for technology finance will be established to dynamically track trends in the technology industry and changes in enterprises and markets, enabling intelligent risk control and monitoring. Leveraging the role of the national industry-finance cooperation platform and relying on intelligent algorithm models, the manufacturing sector will be better supported.
(9) Empowering the Further Development of Green Finance. Financial institutions will be encouraged to explore innovative financial products and service models based on enterprise carbon accounts, carbon emission data, and environmental, social, and governance (ESG) ratings. Digital technologies for qualitative and quantitative analysis will be utilized to improve the intelligent identification of green enterprises and green projects. Additionally, collaboration with external institutions will be strengthened to use digital technologies for detecting and collecting carbon footprint data, enhancing the measurement, accounting, and disclosure of carbon emission reduction, so as to improve green finance risk management capabilities.
(10) Vigorously Developing Digital Inclusive Finance. The “Xinyidai” (Comprehensive Credit Service Platform for SME Financing) initiative will be advanced to improve the inclusive financing service system based on credit information, thus optimizing credit services for micro, small, and medium-sized enterprises (MEMEs). The construction of a nationwide credit information-sharing platform for the payment and fund flows of MSMEs will be systematically promoted to support banks, under effective risk control, in exploring innovative “decentralized supply chain loan” business models with trade data, thus enhancing the digitalization of supply chain financial services. The implementation of fintech-driven rural revitalization demonstration projects will be deepened. Sound integrated digital platforms for rural revitalization will be established to promote the integration of agriculture-related information and create comprehensive financial application scenarios. The construction and application of the Unified Registration and Publicity System for Financing Backed by Movable Properties will be strengthened to support financial institutions in exploring the use of digital technologies to enhance collateral management for creature assets, production equipment, and other movable assets, thereby expanding the scope of movable property financing.
(11) Continue to Enrich Services for Old-age Finance. Financial institutions will be encouraged to strengthen the application of fintech and deeply mine information and data resources to create accurate profiles of elderly care enterprises. On the premise that the risks are controllable, exclusive credit-based loan products for elderly care will be developed to fully meet the reasonable financing needs of inclusive elderly care service institutions. Focuses will be placed on high-frequency financial scenarios in the daily lives of the elderly population, and accessible financial service systems will be continuously improved. The age-friendly transformation of digital services is to be accelerated by launching the “Care Mode” and the “Elder Mode”, and the promotion and dissemination of relevant products and services is to be enhanced to improve the convenience of digital financial services for elderly people.
(12) Supporting the Enhanced Integration of Digital Technologies and the Real Economy. We will push forward innovation in the digital financial sector at a faster pace. Giving play to the role of the central bank lending facility for sci-tech innovation and technological transformation, we will guide financial institutions to integrate financial services into digital scenarios, such as the Industrial Internet and those related to the Initiative of “AI Plus Industry”, to support the development of core industries in the digital economy as well as digital industrial transformation. Additionally, we will support financial institutions in building digital financial services platforms to enhance scenario aggregation and ecosystem integration and to provide “one-stop” financial services for major projects, key enterprises, and important industrial chains. At the same time, financial institutions will be encouraged to leverage their advantages in Fintech and use their technologies, platforms, and other resources to help promote the digital transformation of small and medium-sized enterprises. They will also be encouraged to build digital platforms for cross-border finance to support the digitalization of shipping trade.
IV. Consolidating the Foundation for the Development of Digital Finance
(13) Fostering an Efficient and Secure Payment Environment. We will improve the capacity of the payment system in emergency handling under special circumstances and strengthen business continuity management so as to ensure the secure, stable, and continuous operation of the payment system. Moreover, we will enhance its functionality, expand its business scenarios, and raise the quality and efficiency of its services to continuously develop a modern payment system that features wide coverage, high efficiency, and security. Meanwhile, prudent steps will be taken to advance the pilot e-CNY program, with more work to be done to improve the environment for e-CNY acceptance and to diversify the scenarios for e-CNY use. Furthermore, we will reinforce anti-money laundering supervision over digital financial businesses.
(14) Cultivating a High-Quality Financial Data Market. We will give play to the roles of the Financial Credit Information Database and the National Credit Information Sharing Platform, put more effort into the collection of enterprise-related credit information, and further optimize the mechanisms for the exploration and application of credit information. We will push financing credit services platforms at all levels to follow the principle of serving the public interest and provide information-sharing services for financial institutions in accordance with laws and regulations, so that financial institutions can collect and use data at lower costs. More emphasis will be placed on the development and utilization of data resources in the financial field, while we will make explorations to build data spaces in the financial industry. In addition, we will take active and prudent steps to promote the development and growth of market-oriented credit reporting and credit rating agencies so as to bring out diversified products and services in this field to support the development of technology finance, green finance, inclusive finance, old-age finance, and digital finance. We will improve the trade reporting system and trade repositories that are expected to cover all financial markets. On the premise of secure operation and compliance with laws and regulations, we will support financial institutions sharing and circulating efficiently among them multidimensional data, such as those on client identification, credit review and approval, and risk check, and we will establish a secure and credible system for data sharing. Working to facilitate and regulate the cross-border flow of financial data, we will unify the regulatory rules and offer relevant guidance to financial institutions.
(15) Stepping up the Development of New Types of Infrastructures Related to Digital Finance. We will guide financial institutions whose conditions allow to plan for the building of green intelligent financial data centers, promote the gathering of new computing power to national hub nodes, and support massive data storage and real-time data invocation. We will build and optimize highly reliable and redundant network structure, improve the robustness and service capacity of financial networks, and construct a highway of communications for the digital transformation of the financial sector. We will also make deployments for an advanced and highly efficient computing power system by speeding up the application of technical standards for cloud computing and artificial intelligence, among others, and by tapping into edge computing and quantum technology to overcome the existing bottlenecks in the use of computing power. These efforts will provide targeted and efficient computing support for the digital transformation of the financial sector.
V. Improving the Digital Financial Governance System
(16) Strengthening Digital Financial Risk Prevention. Financial institutions will be guided to enhance management of their digital financial businesses to ensure regulatory compliance. They will conduct risk assessments regularly as well as compliance reviews of innovative businesses. In the application of new technologies, fit checks and security evaluations will be conducted in a multidimensional manner. At the same time, technical risk management will be strengthened to ensure continuous and stable business operation. We will also improve incentives and the mechanisms for fault tolerance, guiding financial institutions to bring the security of their information systems under better control and to reduce reliance on foreign countries in the use of core technologies. Moreover, we will strengthen risk management of models and algorithms by improving the systems for the security assessments and compliance audits of models, making timely information disclosures on algorithms, and improving algorithmic interpretability, fairness, and security. Additionally, we will urge financial institutions to strengthen outsourcing risk management and to set up arrangements for entry management, ongoing assessment, and exit of external partners.
(17) Enhancing Data and Network Security Protection. Financial institutions will be guided to strictly implement data protection laws, regulations, rules, and standards, to improve their data security management systems, to strengthen the protection of data security via commercial cryptography, and to establish sound mechanisms for whole-process data security management. We will organize financial institutions to regularly conduct risk assessments of data and network security, to identify potential risks, and to be connected to network security situation awareness platforms relevant to the financial industry, while pushing for the interconnectivity among these platforms. Moreover, we will conduct stress tests on network security and enhance the development of network security protection systems. We will also build a public service platform for data and network security of the securities industry and reinforce basic, common security support.
(18) Strengthening Regulation over Digital Financial Businesses. Keeping a close watch on new products, new businesses, and new models of digital finance, we will bring all of them under oversight in compliance with laws and regulations according to the principles for function-based and penetrating regulation. Continued efforts will be made to improve the rules and regulations on digital finance-related businesses and shore up the weak links in a timely manner. We will implement the duties for “regulating legal conduct while placing no less importance on curbing illegal conduct” and “making risk management a must in the management of an industry” to rigorously prevent and crack down on illegal financial activities related to digital finance. Fully leveraging the roles of Fintech innovation pilot programs and regulatory tools, we will strengthen lifecycle management of Fintech innovation activities so as to create a tolerant, prudential, and flexible real-market environment for digital financial innovation. The PBOC will actively participate in international cooperation on digital financial regulation by working with international institutions, such as the International Monetary Fund (IMF), the Bank for International Settlements (BIS), the Financial Stability Board (FSB), and the International Organization of Securities Commissions (IOSCO).
(19) Enhancing the Digitalization of Financial Regulation. We will promote digital remaking of regulatory processes so that key regulatory activities will be better regulated and more transparent. We will step up efforts to develop intelligent analyzing tools and improve the capacities for risk monitoring, early warning, identification, and analysis. Meanwhile, we will advance the development of regulatory big data, expand its coverage to include external data such as that from business administration or judicial agencies and that about public opinion, and improve the mechanisms for the sharing of regulatory data and law enforcement information. We will build a digitalized regulatory platform featuring all-round functions such as information display, intelligent analysis, process management, and smart decision-making.
(20) Improving the Mechanisms for Financial Consumer Protection. We will urge financial institutions to improve the mechanisms for protecting the rights and interests of financial consumers based on digital financial business models and their characteristics. We will smooth the channels for financial consumers to lodge complaints and establish diversified mechanisms for financial dispute resolution. By launching education, training, and public awareness programs on digital finance, we will work to improve consumers’ financial literacy, their ability to use digital financial products, and their awareness of risk prevention. At the same time, we will see that financial institutions keep in place the traditional cash service models. We will raise the quality of cash services, bridge the digital gap, and ensure that elderly people and other groups have equitable access to financial services.
VI. Coordinating Efforts and Providing Organizational Support
(21) Establishing a Coordination Mechanism. A mechanism will be established for coordination among the PBOC, NDA, NDRC, MIIT, NFRA, CSRC, and SAFE, whereby we will hold special sessions under the framework of the Inter-Ministerial Joint Conference on Digital Economic Development to enhance policy coordination and information sharing and join efforts in advancing digital transformation of the financial sector. We will organize activities regularly to support the financing needs in order to promote the integration of digital technologies into the real economy and to support high-quality economic and social development. Meanwhile, we will closely watch out for the relevant financial risks. Financial regulatory agencies will perform their respective duties to move ahead with the digital financial work in their specialized areas.
(22) Reinforcing Monitoring and Assessment. We will organize assessments on financial institutions’ digital transformation progress to give appraisals to their abilities in data mining and digital technology application. We will take exploratory steps to set standards and regulations for digital finance-related statistics, offer guidance to financial institutions on routine data reporting, duly carry out statistical monitoring, and work on incorporating relevant statistics into the financial institution appraisal system.
(23) Stepping up Publicity Efforts. We will make attempts to launch pilot programs on digital financial businesses, step up efforts to promote digital financial policies and conduct trainings, and work fast to come up with replicable practices that can be widely applied. Through timely reviews of the work done to advance digital financial development, we will sum up good practices and exemplar models and enhance publicity efforts, thereby creating a favorable atmosphere for the development of digital finance.
People’s Bank of China
National Development and Reform Commission
Ministry of Industry and Information Technology
National Financial Regulatory Administration
China Securities Regulatory Commission
National Data Administration
State Administration of Foreign Exchange
November 21, 2024
