The fast-growing Chinese Internet finance industry has vast development space, but potential risks still exist, according to a report McKinsey & Co sent to the Global Times on Thursday.

The Internet finance industry in China is experiencing fast growth that is releasing great potential in sectors including mobile payments, online consumer finance and big data application.

To grab this promising market, Internet companies have developed Internet financial platforms based on their vast number of clients.

Traditional financial institutions have also stepped up efforts to digitize their business. Industrial and Commercial Bank of China's online trading platform had handled trade volume of 800 million yuan ($122 million) as of 2015.

However, the report also said the risks and uncertainties exist. These include irrational consumer behavior, design flaws in financial products and fraud.

Also, Internet finance companies will confront a tougher regulatory environment because the government has announced it will reinforce Internet finance management to better protect the interests of investors.

In July 2015, the People's Bank of China, the central bank, issued a guideline to boost the sound development of Internet finance, the first of its kind in this industry.

Global Times