#Digitalization represents the trend of future development of the #capitalmarket, but #China’s capital market still faces many challenges in its digitalization, according to Xiao Gang, former CSRC Chairman:
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1. The challenge of global competition. Compared with their counterparts in developed countries, securities firms and fund managers in China fall short in IT investment...2/9
2. The integration of the capital market and digital currencies will confront difficulties. Many countries are working to introduce digital fiat currencies, but how could the new currencies accommodate the capital market? What fundamental changes will they bring about? 3/9
3.1. Increasing echnology-finance integration - technology firms have ventured into capital market and financial services, while financial institutions are seeking digitalization, some of them even hoping to transform into technological firms...4/9
3.2. As a result, the two types of institutions are increasingly integrated with each other with rising competition between them, which has posed new challenges to the development of the capital market and financial risk management...5/9
4. Regulation needs to be upgraded. Amid the boom of digital economy and finance, especially the digital capital market, regulators find themselves in a new situation different from the traditional market environment that requires new regulatory frameworks, means and tools...6/9
5. Consumer and investor protection. The boundaries between some financial products and services are increasingly blurred as digital finance and digital capital market develop. Legislation has failed to keep up with the change, making investor & consumer protection harder...7/9
6.1. Organizational transformation. Digitalization will breed new types of organizations and institutions such as virtual exchanges. Besides, digitalization of financial institutions will bring about organizational change...8/9
6.2. Securities firms, fund managers and futures brokers will have to transform their traditional product- and account-based business models and organizational structures to new, customer-oriented ones. 9/9
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