Interpretation of the Implementation Plan for High-Quality Development of Green Finance in the Banking and Insurance Industry: Strengthening Data Foundation and Promoting Digital Transformation of Green Finance

Interpretation of the Implementation Plan for High-Quality Development of Green Finance in the Banking and Insurance Industry: Strengthening Data Foundation and Promoting Digital Transformation of Green FinanceOn February 27, 2023, the website of the National Financial Regulatory Administration (NFRA) published the Implementation Plan for High-Quality Development of Green Finance in the Banking and Insurance Industry (hereinafter referred to as the "Plan"), jointly issued by the Office of the NFRA and the Office of the People's Bank of China. The Plan aims to promote the high-quality development of green finance in the banking and insurance industry, with data foundation construction and digital transformation at its core

Interpretation of the Implementation Plan for High-Quality Development of Green Finance in the Banking and Insurance Industry: Strengthening Data Foundation and Promoting Digital Transformation of Green Finance

• On February 27, 2023, the website of the National Financial Regulatory Administration (NFRA) published the Implementation Plan for High-Quality Development of Green Finance in the Banking and Insurance Industry (hereinafter referred to as the "Plan"), jointly issued by the Office of the NFRA and the Office of the People's Bank of China. The Plan aims to promote the high-quality development of green finance in the banking and insurance industry, with data foundation construction and digital transformation at its core. The Plan emphasizes strengthening the data foundation, enhancing data governance, and accelerating the digital construction of green finance to improve green finance management and promote sustainable development.

The Plan first points out that banking and insurance institutions need to establish and improve a green finance statistical data management system and effectively implement relevant requirements of the green finance statistical system. This requires institutions to improve their internal data collection, auditing, and reporting processes to ensure that the standardization, timeliness, and accuracy of green finance statistical data are significantly improved.

To achieve this goal, the Plan clarifies the importance of strengthening data governance. Institutions need to strengthen the inspection and audit supervision of data quality and establish a strict internal control mechanism to resolutely prevent violations such as data concealment and falsification. Only through strict data management can the reliability of green finance statistical data be ensured, providing accurate basis for decision-making and avoiding resource misallocation and policy errors caused by data deviations.

The Plan's emphasis on data governance goes beyond optimizing internal processes. It points more deeply to improving data quality and preventing risks. Data concealment and falsification not only distort the true picture of green finance development but also severely damage the reputation of financial institutions and may even lead to serious legal consequences. Therefore, this requirement of the Plan is both a stringent requirement for data quality and a strong constraint on the compliant operation of financial institutions.

The Plan's discussion on accelerating the digital construction of green finance reflects the country's expectation of technological empowerment for green finance development. The Plan encourages banking and insurance institutions to actively utilize advanced technologies such as big data, blockchain, and artificial intelligence to gradually improve the management level of green finance. This will help institutions more accurately identify and evaluate green finance projects, more effectively monitor and manage green credit risks, and ultimately promote the optimal allocation of green finance resources.

Big data analysis technology can help institutions more comprehensively understand the environmental and economic benefits of green finance projects, thereby assisting decision-making and reducing blind investment. Blockchain technology can improve the transparency and traceability of green finance transactions, effectively preventing fraudulent activities. Artificial intelligence technology can achieve intelligent early warning and identification of green credit risks, improving risk management efficiency.

The Plan's proposals on digital construction do not require all institutions to immediately undergo a complete transformation but encourage institutions to gradually promote digital construction based on their own circumstances. This reflects the pragmatism and operability of the policy. Different scales and types of institutions may have different paths and progress in digital construction; the Plan allows institutions to formulate appropriate digital transformation strategies based on their own situations.

In summary, the Plan takes data as its core, guiding the high-quality development of green finance in the banking and insurance industry by strengthening the data foundation and promoting digital transformation. The release of the Plan is not only a significant impetus to the development of green finance but also sets higher requirements for the data governance capabilities and technological application capabilities of financial institutions. The future development of green finance will be more reliant on data-driven and technology-enabled approaches, and the implementation of the Plan will lay a solid foundation for this development model. The implementation of the Plan will effectively promote the active participation of the banking and insurance industry in the national green development strategy, making greater contributions to building a green financial system. This will not only help promote sustainable economic development but also improve the stability and resilience of the financial system. By strengthening data management and actively applying new technologies, financial institutions can better play their role in the development of green finance and contribute to achieving the carbon peak and carbon neutrality goals. This will also enhance the competitiveness of financial institutions and promote their long-term sustainable development. The implementation of the Plan will have a profound impact on the development of green finance in China.