The China Banking and Insurance Regulatory Commission (CBIRC) has asked banks in China to strengthen risk management in supply chain finance transactions.
According to Regulation Asia, banks have been asked to strengthen risk management in supply chain finance transactions through risk monitoring, industry research and new technologies.
Zhou Liang – CBIRC vice chairman – recently stated that supply chain finance business will help to improve the stability and competitiveness of China’s industrial supply chain and accelerate economic development.
Some banks are already testing out new models, Liang remarked, such as leveraging new technologies like IoT and blockchain to strengthen risk controls and financial services convenience.
He also encouraged banks to use innovation to offer supply chain finance based on real economic needs such as addressing goods verification, risk monitoring and preventing and controlling IT application risks.
The CBIRC will look to coordinate improvements in order to incentivise mechanisms, optimise the regulatory framework, develop infrastructure to support chain finance business and strengthen the credit system.
In addition, Zhou stressed that the CBIRC will look to encourage some Chinese regions to actively explore information service platform development and new supply chain finance models to ensure timely risk assessments can be undertaken.
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