Global FinTech Guide
Country Name
RegTech and compliance management
RegTech is composed of the words “regulatory” and “technology”. It is a collective term for the application of modern technologies, to get the increasing regulation in the banking- and financial sector under control both from an IT and a legal standpoint.


Attitude of the country towards RegTech-services

The overall climate of RegTech in China is still at an early stage. In May 2017, PBOC announced to establish the Fintech Committee, which aimed to strengthen the planning and coordination of FinTech and proposed to improve the application and practice of RegTech. On 23 May 2018, CSRC issued “General Development Framework for RegTech”, where a three-phase development plan has been proposed, namely RegTech 1.0, RegTech 2.0 and RegTech 3.0. 

At the stage of RegTech 1.0, it is aimed to improve the digitisation, automation, and standardisation of regulatory and supervision work by establishing sophisticated and efficient software. However, in consideration of national security, the governments will give priority to state-owned companies rather than foreign-invested companies. RegTech 2.0 mainly targets on optimising the construction of business systems and realising online operation of whole-process as well as cross-departmental supervision, through improving functions of a central regulatory information platform. RegTech 3.0 emphasises on the application of big data and establishment of real-time monitoring of the capital market. 

An early age means more opportunities along with exploration and efforts towards ambiguities. Reg-Tech services are encouraged and the policy is temporarily easy for its development. Governments are also at the stage of observing and policy making for the construction of RegTech industry.

Legal affairs  

Obligations and requirements to provide RegTech-services

There are no binding laws or regulations yet in China to set forth the definition of RegTech, thus no specific license is required for RegTech-service providers. However, it should be noted that the RegTech-services providers are usually technology companies undertaking the business in terms of big data, blockchain, software, artificial intelligence, Cloud computing etc. Accordingly, Tech companies need to apply for licenses or qualifications for business related to software and other technology required by specific market regulatory department.

Additional comments regarding the legal situation for RegTech-services or what RegTech’s must be aware of in this business area

From a legal perspective, RegTech service providers need to pay attention to increasingly tightened regulations towards cybersecurity and data security in China, relating to big data analysis and data processing etc. 

From a business perspective, FinTech companies are advised to be aware that the RegTech industry heavily depends on the demand on a governmental and regulatory side, who are major parties of procurement. For national security’s sake, companies with a major foreign background might not be preferred. 

Economic conditions

Market size for RegTech-services and biggest companies in this business area

The RegTech industry sees an increasing market based on more policies and ‘top-level design’ to encourage its development, yet without a foreseeable quantitative estimate. There has been a drastic growth in investment into IT-services for banks and financial institutions. Following the implementation of ‘General Development Framework for RegTech’, the market for RegTech-services may be rapidly enlarged and deepened. 

Though, without a precise market share number, it should be noticed that the biggest companies that have close cooperation with the government related to RegTech include Huawei, ZTE and Inspur etc.

Additional comments regarding the economic situation for RegTech-services or what RegTech’s must be aware of in this business area

For traditional FinTech corporations who want to develop RegTech business, kindly note that giant internet platform companies or FinTech companies are facing increasingly strict regulations and supervision in China concerning anti-monopoly and privacy protection etc. Emphasis was also made on the separation and isolation between the businesses of finance and technology, for the purpose of reducing systematic financial risks. In this regard, RegTech is more of a tech-side industry, which plays an essential role in financial infrastructure to promote more efficient and high-quality financial supervision and regulation.



© 2022, JunHe LLP. All rights reserved by JunHe LLP as author and the owner of the copyright in this chapter. JunHe LLP has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this guide.

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.


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