Yi Gang, governor of the People's Bank of China, speaks at the session of "Monetary Policies: Back to Normal" during the Boao Forum for Asia Annual Conference 2018 in Boao, south China's Hainan Province, April 11, 2018. Photo: Xinhua/Guo Cheng

China's central bank governor on Wednesday vowed to strengthen the legal system for personal information protection in the finance sector as the rapid growth of fintech gives rise to concerns over data privacy.

Along with fintech's fast-paced growth over the past decade, AI, big data, cloud computing, distributed ledger and e-commerce, among other technologies, have been widely applied in the financial sector, making financial services more inclusive, convenient and efficient, Yi Gang, governor of the People's Bank of China (PBC), the country's central bank, said in a speech via video to the Hong Kong FinTech Week.

Nonetheless, big data, the most important of these technologies, means that big technology companies have become increasingly privileged in the possession, use and storage of data, Yi said, calling attention to protecting personal privacy.

There have been cases of such companies collecting and inappropriately using clients' information without prior permission, and there have even been user data breaches, he noted, pledging to improve the legal system for, as well as tighten regulation on, personal data protection. 

Laws and rules were in place as early as 1992 that laid out financial institutions' legal obligations to protect users' data. Moreover, China's data security law was passed in June and the personal information protection law was passed in August, instituting an initial legal framework for data protection.

Personal information protection related mechanisms in the fields of anti-money laundering, consumer rights protection and credit checks have been rolled out by the PBC since 2005. 

More recently, the central bank has focused its efforts on handling the excessive collection of personal information in financial activities and clauses that ban access to services if users don't agree to provide personal data, Yi said.

The PBC unveiled rules on credit checks in September, putting the gathering, processing and provision of individual credit information under its purview. 

Fintech firms were ordered to divest individual credit-related businesses and provide credit information services through licensed personal credit reporting agencies. 

The PBC has previously revealed plans to unveil interim rules for personal financial information protection.

The time is ripe for the PBC to publish the much-anticipated interim rules, taking into account China's personal information protection law, which went into effect on Monday, Huang Zhen, director of the institute of financial law at Central University of Finance and Economics, told the Global Times on Wednesday.

Tougher regulations on personal data protection will mean rising compliance costs for financial institutions. It will also prompt those that previously took advantage of legal loopholes, such as implicit consent with no opt-out option, to restructure their businesses in accordance with the law, Huang said.

Average users, for their part, can also better protect their rights as the legal framework being continuously fleshed out offers them a clearer route to safeguard their rights in cases of privacy infringement and data breaches, the expert remarked.

The PBC chief pledged to explore more precise data rights confirmation, more convenient data transactions, and more reasonable data usage, on the premise of fully protecting personal information, so as to spur the vitality of market entities and sci-tech innovation.

Yi urged legislative, judicial and administrative authorities across the globe to strengthen cooperation and regulatory coordination in antitrust efforts, data regulation and consumer rights protection. A joint push for global standard setting in personal information protection was highlighted. 

Global Times 

Yi Gang, governor of the People's Bank of China, speaks at the session of "Monetary Policies: Back to Normal" during the Boao Forum for Asia Annual Conference 2018 in Boao, south China's Hainan Province, April 11, 2018. Photo: Xinhua/Guo Cheng

China's central bank governor on Wednesday vowed to strengthen the legal system for personal information protection in the finance sector as the rapid growth of fintech gives rise to concerns over data privacy.

Along with fintech's fast-paced growth over the past decade, AI, big data, cloud computing, distributed ledger and e-commerce, among other technologies, have been widely applied in the financial sector, making financial services more inclusive, convenient and efficient, Yi Gang, governor of the People's Bank of China (PBC), the country's central bank, said in a speech via video to the Hong Kong FinTech Week.

Nonetheless, big data, the most important of these technologies, means that big technology companies have become increasingly privileged in the possession, use and storage of data, Yi said, calling attention to protecting personal privacy.

There have been cases of such companies collecting and inappropriately using clients' information without prior permission, and there have even been user data breaches, he noted, pledging to improve the legal system for, as well as tighten regulation on, personal data protection. 

Laws and rules were in place as early as 1992 that laid out financial institutions' legal obligations to protect users' data. Moreover, China's data security law was passed in June and the personal information protection law was passed in August, instituting an initial legal framework for data protection.

Personal information protection related mechanisms in the fields of anti-money laundering, consumer rights protection and credit checks have been rolled out by the PBC since 2005. 

More recently, the central bank has focused its efforts on handling the excessive collection of personal information in financial activities and clauses that ban access to services if users don't agree to provide personal data, Yi said.

The PBC unveiled rules on credit checks in September, putting the gathering, processing and provision of individual credit information under its purview. 

Fintech firms were ordered to divest individual credit-related businesses and provide credit information services through licensed personal credit reporting agencies. 

The PBC has previously revealed plans to unveil interim rules for personal financial information protection.

The time is ripe for the PBC to publish the much-anticipated interim rules, taking into account China's personal information protection law, which went into effect on Monday, Huang Zhen, director of the institute of financial law at Central University of Finance and Economics, told the Global Times on Wednesday.

Tougher regulations on personal data protection will mean rising compliance costs for financial institutions. It will also prompt those that previously took advantage of legal loopholes, such as implicit consent with no opt-out option, to restructure their businesses in accordance with the law, Huang said.

Average users, for their part, can also better protect their rights as the legal framework being continuously fleshed out offers them a clearer route to safeguard their rights in cases of privacy infringement and data breaches, the expert remarked.

The PBC chief pledged to explore more precise data rights confirmation, more convenient data transactions, and more reasonable data usage, on the premise of fully protecting personal information, so as to spur the vitality of market entities and sci-tech innovation.

Yi urged legislative, judicial and administrative authorities across the globe to strengthen cooperation and regulatory coordination in antitrust efforts, data regulation and consumer rights protection. A joint push for global standard setting in personal information protection was highlighted. 

Global Times