IFF Global Finance and Development Report 2023: foam Problem in Global Digital Finance Patents | IFF 20th Anniversary Global Annual Meeting

Southern Finance and Economics All Media Reporter Ma Jialu Reports from Nansha

With the deepening development of digital technology, the new model of "technology+finance" has received widespread attention worldwide. The "2023 Global Finance and Development Report" (hereinafter referred to as the "Report"), released at the 20th Anniversary Global Conference of the International Financial Forum (IFF) on October 28th, pointed out that digital technology is reconstructing the financial ecosystem, and big data, artificial intelligence, and blockchain finance are leading the development of global digital finance.

With the continuous expansion of the depth and breadth of the application of information technology in the financial industry, in addition to promoting the digital transformation of traditional financial institutions, emerging financial formats such as digital currency, digital banking, digital insurance, digital payment, and DeFi (decentralized finance) have also emerged. The report analyzes that compared to traditional finance, digital finance has the characteristics of informatization, networking, and intelligence. Data and information technology have become increasingly important resources, platforms, means of production, and production methods from past tools, and are changing the economic and financial structure and methods, injecting power and vitality into the economy and finance.

The report analyzes the current development status of global digital finance from the perspective of patents. In general, from 2017 to 2022, the number of global digital financial patent applications grew at an average annual rate of 10 percentage points, making a huge growth, but the proportion of authorization was relatively low, reflecting the serious foam problem of global digital financial patents, and patent quality needs to be further improved. In particular, China's related patent applications have consistently ranked first in the world, but the proportion of patent authorizations has not reached the global average (21%), only 16.6%.

Data has become a highland that countries are vying to occupy. Currently, governments around the world attach great importance to the development of the big data industry, and strategic policies at the regional and national levels are frequent, opening up a 'big data competition' between countries. The report believes that big data finance focuses on using massive amounts of data for analysis and decision-making; Artificial intelligence finance focuses on simulating the human brain to achieve intelligence; Blockchain finance focuses on decentralization and improving transparency, and they can integrate and promote each other.

However, the report also points out that from another perspective, digital technology has not fundamentally changed the essential characteristics of the financial industry. The credit risk, liquidity risk, maturity and currency mismatch risks faced by the traditional financial industry continue to exist, and a series of new risks and challenges have emerged. On the one hand, the application of cutting-edge technologies such as big data and blockchain in financial service scenarios exhibits highly segmented and intersecting business characteristics, which will blur the boundaries of different financial institutions; At the same time, the emerging new financial formats and trading behaviors are also difficult to effectively regulate within the existing legal framework. On the other hand, the role of the Internet has accelerated the speed of risk transmission and presented significant characteristics across industries and regions. Therefore, the widespread application of information technology not only improves the operational efficiency of financial institutions, but also highlights the complexity, contagiousness, concealment, and suddenness of systemic financial risks, with endogenous risks accumulating within the system. This puts forward higher requirements for the regulatory system, regulatory methods, and the technical and business capabilities of regulatory talents.

The report analyzes that currently, regulatory policies in various regions are mainly focused on technology and data compliance, and there is no systematic and effective digital finance regulatory policy yet. Faced with the innovation and development of digital finance, traditional regulatory mechanisms have shown issues of lag and failure. Exploring and improving the regulatory framework of digital finance and constructing a reasonable digital finance regulatory system are the key to promoting the healthy development of digital finance.

The report calls for regulatory authorities in various countries to make adaptive adjustments from three aspects: regulatory philosophy, regulatory methods, and regulatory intensity, and to introduce more regulatory measures targeting the field of "digital technology+finance" as soon as possible. In addition, the rise of digital finance has made the global financial system more interconnected, and its development is related to many aspects such as value, security, ideology, etc. It is also necessary to strengthen global cooperation and guide the healthy and orderly development of digital finance.