Regulators can’t ignore online risks

Source:China Securities Journal Published: 2013-10-31 21:18:01

China's biggest online companies are piling into the booming world of e-finance. In June, e-commerce giant Alibaba Group launched Yu'E Bao, a money market fund open to users of its Alipay service. Earlier this week, Baidu Inc responded with its online wealth management service Baifa, which has already brought in more than 1 billion yuan ($164.3 million) in investment. Meanwhile, e-commerce retailers like Suning Appliance Co are also signaling interest in this new market.

But as online financial services pick up steam, they present new challenges for regulators. Given the nature of the Internet, confidential banking and personal details can quickly spread online if they are ever leaked. The absence of a paper trail when investing online could also expose service providers and their users to fraud.

Securities and financial authorities need to extend their supervision into this new environment to ensure the safety of users. Several other countries have already introduced policies to protect investors' rights and China needs to do the same.

The author is Xiang Zheng, a media personality.

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