How To Break The Internet Financial Mess?

1. legislation lag

At present, there is no national legislation specifically targeting Internet Finance in China. The current regulation of Internet finance is based on laws and regulations in the traditional financial industry. In the face of Internet financial innovation, regulatory agencies often fall into the dilemma of "degree", and many Internet financial companies are unable to determine whether they are in violation of the law after innovating new financial services products, which may ultimately limit the healthy and sustainable development of Internet finance.

It is urgent to accelerate the legislation of financial e-commerce on the basis of the "Electronic Signature Act" and the national financial regulations.

(1) lack of a unified and feasible regulatory mechanism.

China's current regulation of Internet finance is mainly responsible for the traditional "one line, three sessions", while Internet banking is a composite business of the Internet information service industry and financial services industry. Many innovative products are just combined punches, often hitting a row of three ball edges, so that supervision can not be implemented and will lead to regulatory loss.

2. Lack of a clear definition of regulatory content.

At present, regulators do not set up access threshold and operation rules for all kinds of Internet financial institutions, nor do they provide information disclosure regulations.

In the absence of industry standards, setting up regulatory departments alone has failed to play a role. This is also one of the reasons for the current chaos in Internet finance.

3. There are regulatory omission in specific supervision.

In the absence of specific regulatory guidelines for Internet finance, careful monitoring and rapid action of the regulatory executive are particularly important.

But in fact, compared with the traditional financial industry, regulators are relatively relaxed about the Internet financial industry, so that P2P net loan companies frequently appear in the financial sector and the third party payment network laundering chaos. One of the reasons is the oversight of executive inaction.

(1) industry self-discipline is weak: there is still an authoritative nationwide Internet Financial Industry Association. At present, the existing national self-regulation organization is only a branch of the China payment and liquidation association or the China Internet association. It is known as the association of China Internet Finance Association (ACIFI). It is also a spontaneous Association initiated by individuals without the official background of financial supervision.

2. Lack of professionalism: most of the managers in the Internet financial industry are technical backgrounds and lack knowledge of financial knowledge.

Due to the lack of qualifications and experience in the financial industry, there is often no way to manage the internal management and risk control of the organization, and some internet financial institutions are not strong enough to make the security of the institutional platform weak and the quality of service poor.

Lack of business ethics: some internet financial institutions ignore legal and moral constraints, drill loopholes in the law, and use fraudulent means to defraud investors of their money.

Lack of risk control consciousness: most internet financial institutions are concerned only with how much investment they can absorb, but lack of attention in risk control, personnel management, system security and so on, which has caused huge risks in the industry.

(1) investors are weak in risk awareness and have a fluke mentality. They follow suit and invest only in pursuit of high yield. They risk ambiguity in product itself and buy high-risk products in a muddle.

2. Investors are too strict in pursuit of guarantees. When losses occur, they demand capital preservation. This makes investors focus their attention on the commitments of the sellers. This practice of putting the cart before the horse has weakened the investment ability of investors.

Investors do not attach importance to product risk discernment and endurance. Relying solely on brand and quality of sales organization and so-called guarantee will be in danger.