Compliance 'the lifeline' of financial technology companies: Lexin
China’s financial technology industry is “entering the midfield stage” after around ten years’ development, and compliance will be “the lifeline” for the fintech players as the regulators are tightening the scrutiny over the fast-growing sector, according to industry insiders.
Xiao Wenjie, chairman and chief executive officer of LexinFintech Holdings Ltd, a leading online consumer finance platform, said on LendIt Fintech conference held in Shanghai on Thursday that there used to be some chaos in the fintech space during the past few years due to the imperfect supervisions.
But as the watchdog is determined to rein in the country's loosely-regulated online lending market, it is becoming all the more important for financial technology firms to make sure that their business operations are in line with compliance, Xiao added.
Fintech companies have allied with traditional financial service providers like banks and insurers by reducing their customer acquisition cost and strengthening their risk control capabilities among other aspects in the past five years.
In the future, more players in the industry will join the army to serve the real economy and enable the world’s second largest economy’s consumption upgrade, as there remains a great gap between China and developed markets in this regard, Lexin’s head noted.
Data showed that as of the end of 2017, US saw its proportion of consumper finance in the gross domestic product stood at around 20 percent, while the number for China was below than 8 percent.