Addressing the pain points and challenges of deep integration among finance, technology, and industry.

Against the backdrop of an accelerating new round of scientific and technological revolution and industrial transformation, the deep integration of science and technology, industry, and finance—coupled with the development of a competitive, modernized industrial system—has become an indispensable pathway to achieving high-quality development. While continuously strengthening its support for technological innovation, the financial sector is also exploring practical avenues for cultivating its own new‑type productive forces. Meanwhile, the rapid rise of emerging technologies such as artificial intelligence in recent years is ushering in disruptive changes across the financial industry.

  Financial resources nurture new‑type productive forces.

  Recently, a series of policy documents have been issued in quick succession, promoting, from multiple angles, the financial sector’s support for fostering new‑type productive forces.

  In April, the National Administration of Financial Regulation, the Ministry of Industry and Information Technology, and the National Development and Reform Commission jointly issued the “Notice on Deepening Financial Services for the Manufacturing Sector to Support the Advancement of New‑Type Industrialization.” The document explicitly states that banking and insurance institutions should vigorously implement the innovation‑driven development strategy and help foster the growth of new‑type productive forces.

  In May, the National Administration of Financial Regulation issued the “Guiding Opinions on Doing a Good Job with the Five Major Financial Tasks in the Banking and Insurance Sectors” (hereinafter referred to as the “Guiding Opinions”), aiming to thoroughly implement the decisions and arrangements made at the Central Financial Work Conference regarding the five major financial tasks—science and technology finance, green finance, inclusive finance, elderly‑care finance, and digital finance. Under the unified guidance of the Central Financial Commission, and with a focus on fostering new drivers of productivity, the document seeks to ensure the effective and meticulous implementation of these five key financial initiatives, thereby enhancing the quality and effectiveness of financial services in supporting the real economy.

  As the foremost of the “five major financial initiatives,” science-and‑technology finance refers to a financial system that serves technology‑driven enterprises. By integrating credit, bonds, equity, and other financial instruments, it provides financing tailored to each stage of the enterprise’s lifecycle, effectively aligning financial resources with technological capabilities, stimulating R&D vitality, and accelerating the commercialization of scientific and technological innovations—thus becoming an indispensable engine for the growth of science‑and‑technology enterprises. The Guiding Opinions emphasize the need to focus on addressing bottlenecks and pain points to enhance the quality and effectiveness of science‑and‑technology finance, while, in light of the development patterns and characteristics of technology‑oriented firms, offering end‑to‑end financial services throughout their entire lifecycle.

  At the local level, financial authorities in several provinces—including Jiangsu, Henan, Shaanxi, Xinjiang, and Anhui—have recently issued a series of guiding documents aimed at supporting the development of new‑type productive forces.

  At the 2024 “Integration of Technology, Industry, and Finance” special roadshow and the third-anniversary exchange event marking the launch of the National Industry-Finance Cooperation Platform, held recently in Zhengding, Shijiazhuang, Vice Minister of Industry and Information Technology Xin Guobin revealed that the “Integration of Technology, Industry, and Finance” initiative represents an innovative exploration in industry–finance collaboration. Over the three years since the platform’s launch, it has helped enterprises secure more than RMB 830 billion in financing, registered over 290,000 high-quality companies, and onboarded more than 2,400 financial institutions.

  According to reports, the “Integration of Technology, Industry, and Finance” initiative has been implemented since 2021 by the Ministry of Industry and Information Technology in collaboration with stock exchanges and various investment institutions. It aims to channel capital toward early-stage, small-scale, and hard‑tech ventures, thereby establishing a sustained and stable mechanism for innovation investment that enhances the commercialization and industrialization of scientific and technological achievements. In the same year, the National Industry–Finance Cooperation Platform was launched. Built on data resources from the Ministry of Industry and Information Technology and related entities, this non‑profit public service platform has established a collaborative framework for integrating technology, industry, and finance, helping to foster deep convergence between technological innovation and industrial advancement.

  Industry experts contend that new‑type productive forces are characterized by a substantial boost in total factor productivity, with innovation as their defining feature, quality as the key determinant, and advanced productive forces at their core. Research breakthroughs and the commercialization of scientific and technological achievements alike depend on financial support. To enable finance to better serve technological innovation, we must make concerted efforts to develop robust science‑and‑technology finance, fostering mutual reinforcement and synergy between technology and finance—only then can we accelerate the emergence of new‑type productive forces and powerfully advance high‑quality development.

  Fintech is accelerating innovation and iteration.

  As financial resources continue to nurture new‑type productive forces, the financial sector itself is also gradually developing its own. With the rapid advancement of financial technology, institutions are both strengthening their digital infrastructure—building secure, compliant, and unified technological platforms based on big data, cloud computing, blockchain, and other digital technologies—and driving ongoing innovation in digital services. They are streamlining digital service workflows, accelerating the development and iteration of digital financial products, and unlocking new capabilities in financial services.

  Yang Xiaojing, a specially appointed expert in Beijing, explained that, in a broad sense, financial technology refers to innovations driven by various technologies that can influence and transform financial markets, financial institutions, or the way financial services are delivered. China’s financial technology sector ranks among the world’s leading, particularly in the area of mobile payments. According to the People’s Bank of China’s 2023 report on the overall operation of the payment system, banks processed a total of 296.163 billion electronic payment transactions in 2023, amounting to RMB 339.527 trillion. Among these, the total value of mobile payment transactions reached RMB 55.5 trillion, up 11.15% year on year. In March this year, the UK-based think tank Z/Yen Group, together with the China (Shenzhen) Institute for Comprehensive Development, released the 35th edition of the Global Financial Centres Index (GFCI 35), which showed that Shenzhen maintained its position as the fourth‑ranked global financial center in terms of fintech development, trailing only New York, London, and San Francisco.

  “Driven by rapid technological advancement and the rise of a robust consumer market, vast user demand has given rise to numerous viable business applications and models. China has long been one of the world’s largest fintech markets, with leading global advancements in mobile payments, financial fraud prevention and identity verification, and consumer finance. Companies, talent, and technologies in these sectors are actively expanding overseas, integrating into and shaping global value chains,” said Yang Xiaojing.

  As artificial intelligence (AI) technologies—led by large-scale models—accelerate their iterative upgrades, this highly pervasive and disruptive technology is reshaping the financial industry. As the inventor of numerous international and domestic patents related to internet finance and big‑data applications, Yang Xiaojing’s career has witnessed the three distinct phases of AI’s evolution within finance. According to her, from 2010 to 2014, AI was primarily used for statistical analysis; the company she founded leveraged these technologies to assist asset management firms in performance and trade analytics. From 2015 to 2020, the vast volumes of unstructured internet data—including spatiotemporal map data—provided a robust foundation for machine learning, enabling AI to uncover novel investment factors and giving rise to industry innovations such as collaborations between internet giants like Baidu and asset managers to launch big‑data‑driven funds. Since 2020, the most significant advances have centered on integrating large models with domain‑specific financial knowledge and deploying agents to power intelligent investment advisory services and customer‑service systems, thereby genuinely replacing certain aspects of human productivity.

  “U.S.-based OpenAI has positioned finance as its top priority for deploying AI technologies. First, it partnered with Morgan Stanley to launch a GPT‑4‑powered robo‑advisor; then, following the May 14 release of GPT‑4o, it collaborated with Reddit—the popular U.S. forum and a major hub for retail investors—enabling OpenAI to leverage community‑generated content to train its models, drawing widespread attention from capital markets,” explained Yang Xiaojing. “Looking at the domestic landscape, several banks—including the Industrial and Commercial Bank of China and the Agricultural Bank of China—have already rolled out proprietary large‑model platforms to support applications such as intelligent risk management and smart operations. Meanwhile, certain internet‑based securities platforms catering to individual users, like Eastmoney and Tonghuashun, have also filed with the Cyberspace Administration of China and unveiled financial dialogue‑oriented large models.”

  Better risk prevention and control will further drive scientific and technological innovation.

  Industry insiders believe that leveraging financial innovation to drive technological advancement and steer production toward greater intelligence, efficiency, sustainability, and safety is one of the core engines of new‑type productive forces. However, in the process of fintech innovation, striking a balance among risk management, value creation, and resource allocation remains a critical challenge—and a major bottleneck—for the financial sector as it seeks to cultivate this new form of productivity.

  “In the first phase of large‑model development in the financial sector, regulatory frameworks have been refined and implemented, industry applications have become increasingly diverse, and technology providers across banking, insurance, securities, and other fields have shown strong enthusiasm, yielding notable results,” Yang Xiaojing told reporters. “However, shortcomings and underlying concerns remain. For instance, core technologies and applications such as large models are fundamentally rooted in breakthroughs in foundational knowledge and theory—areas where China’s ecosystem and long-term investment still fall short. Moreover, talent cultivation in these domains is only just getting off the ground. These two gaps will determine whether we can maintain a sustained competitive edge and urgently warrant attention.”

  More importantly, the financial sector has extremely stringent requirements for risk management and security, necessitating close attention to three key areas: model‑risk oversight, data‑use security, and ethical governance. First, model risk requires robust technical implementation standards and effective supervision. Large‑scale models feature complex architectures with a vast number of parameters, posing significant challenges in terms of interpretability, safety, and other dimensions. For instance, such models must deliver fair, transparent, and secure outcomes; otherwise, they may undermine trust in the technology.

  Secondly, the secure use of data is paramount. Financial data encompasses highly valuable and sensitive information. For instance, in cross-border financial scenarios, it includes users’ personal privacy, corporate details, and economic activity data, all of which must be handled in strict compliance with the Regulations on the Supervision and Administration of Non‑Bank Payment Institutions. At the data‑outflow stage, payment institutions should strive to ensure that any shared personal information adheres to the principle of “minimum necessity.” Although this approach may, in the short term, lead to suboptimal performance of large‑scale models, in the long run, only by enabling data to be developed and circulated under a unified standard can we achieve sustained stability, continuously enhance industry service standards, and foster business innovation.

  Third, ethical governance and accountability must be strengthened. The financial sector demands rigor, yet large models are prone to “hallucinations”—for instance, when a financial‑focused large model provides false or misleading investment advisory services to individual investors in the securities market, it can result in substantial financial losses. If an algorithm causes property damage, should it be held accountable? These questions require proactive preparation and clear clarification in advance.

  “Throughout history, every industrial revolution has begun with technological innovation, been driven by financial innovation, and flourished through industrial innovation. Financial innovation channels sustained investment in new technologies into the industrial system, spurring transformative leaps across industries,” said Xin Guobin at the aforementioned event. He added that, as a new round of scientific and technological revolution and industrial transformation deepens, it is essential to gain a profound understanding of the fundamental principles guiding the advancement of a new type of industrialization in the new era, continuously align financial innovation with the needs of translating scientific and technological breakthroughs into practical applications and scaling up their commercialization, cultivate and develop new‑type productive forces tailored to local conditions, and accelerate the building of a modern industrial system led by scientific and technological innovation and underpinned by advanced manufacturing. (Reporter Wu Wei)

[Editor-in-charge: Ran Xiaoning]

Source: Economic Information Daily