Tech finance data to play bigger role in banking

China's central bank, together with eight other central government departments, recently issued a joint notice to promote the development and use of data in technology finance, with the intention of addressing information asymmetry in the fintech sector to support the country's pursuit of high-level technological self-reliance.

Authorities also released the first version of a national catalogue for data development and utilization in technology finance, which covers eight categories and 26 indicators, including lists of technology enterprises, technological innovation attributes, research and development spending, intellectual property and innovation capability assessments.

According to the notice, the People's Bank of China and relevant authorities will support local governments in developing technology finance data utilization frameworks with regional characteristics, and in building a provincial-level supporting information infrastructure. They will also strengthen the interconnectivity of existing information system resources to facilitate data aggregation and sharing.

Local governments are encouraged to provide authorized information access channels for technology companies and promote services such as information inquiries and joint data modeling. Authorities will launch pilot programs for the innovative development of trusted data spaces in technology finance and encourage qualified regions to make corporate cash-flow data more accessible. They will also establish industry information exchange platforms to enable cross-regional sharing and efficient matching of technology finance data resources.

The authorities also guide financial institutions to leverage technology finance databases to build digital credit profiles for technology companies, develop industry-specific risk management and investment research models, and design financing products tailored to companies in specialized sectors.

Financial institutions are encouraged to cooperate with relevant government departments to analyze capital flows within industrial chains using data such as transaction concentration and counterparty distribution, map key industrial chains and allocate financial resources more precisely.

On March 31, the PBOC, the Ministry of Science and Technology, the National Financial Regulatory Administration and the China Securities Regulatory Commission jointly held a meeting on advancing technology finance. The meeting emphasized improving the alignment between financial services and the financing needs of technological innovation, with a focus on strengthening technology finance ecosystems in Beijing, Shanghai and the Guangdong-Hong Kong-Macao Greater Bay Area. It also stressed greater coordination among government departments rather than fragmented policymaking.

On June 23, Hou Kai, auditor general of the National Audit Office, reported the audit results of central budget implementation and other fiscal revenues and expenditures in 2025 on behalf of the State Council to the top legislature for deliberation in the 23rd Session of the Standing Committee of the 14th National People's Congress.

The National Audit Office examined how Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications and China CITIC Bank had implemented technology finance policies. It found that many specialized technology finance products and services had failed to meet the most pressing financing needs of tech companies.

Experts said the underlying problem identified by the audit is that banks lack access to comprehensive, standardized and reliable data on tech companies. The issue is not that financial institutions are unwilling to support tech firms, but rather that they lack sufficient information to assess these companies' creditworthiness.

The joint notice issued by the nine central government departments is intended to establish national standards, data-sharing channels and coordination mechanisms to provide financial institutions with a stronger basis for making lending decisions, experts said.

Independent economist Mo Kaiwei wrote in a commentary published on Sina Finance on July 31 that the joint notice holds significant importance. By eliminating data silos, unifying data standards and piloting trusted data spaces, it aims to fundamentally address the longstanding problem of information asymmetry in the fintech sector.

Mo added that data related to tech finance in China are currently scattered across government agencies responsible for science and technology, customs, taxation, intellectual property and other areas. The absence of a unified data platform and inadequate cross-departmental and cross-regional data-sharing mechanisms make it difficult for financial institutions to develop comprehensive profiles of technology enterprises.

Without access to key information such as companies' innovation capabilities, R&D spending and intellectual property portfolios, banks face greater difficulty in evaluating credit risk and extending financing to technology firms.

In addition, financial institutions also lack a nationwide system for registering and confirming ownership of data assets, he stated in the commentary.

To address these challenges, he said China needs to break down barriers among public-sector data, industrial data and financial data, establish a standardized data service system, and enhance financial institutions' ability to identify risks and extend targeted credit to innovative enterprises.

This would also reduce financing costs for technology enterprises, and channel more patient capital toward breakthroughs in core technologies. At the same time, clearer rules governing the use of public data will help prevent misuse and support the healthy and sustainable development of China's technology finance ecosystem, he added.