The Risk Management Study About Internet Securities Business In China's Securities Companies

As the development of Internet and e-commerce in the 21st century,it brings challenges and opportunities to the traditional securities business of securities companies.The Internet Finance is changing because of the rapid penetration and integration of Internet Finance since the year of 2013.The reduction of information asymmetry becomes a new profit growth point for securities companies,while the development of Internet securities business also brings rapid changing of the life of people and the mode of investment.Certainly,the development of Internet securities business is like a double-edged sword.The complexity and proliferation of the risk of Internet securities business cannot be underestimated,while the investment benefits from the efficient and convenient of Internet.In recent years,some case studies of Internet securities business issued by China Securities Regulatory Commission(CSRC)have sounded the alarm about the risk management of China Internet securities business.One of the difference between Internet securities and traditional securities which is Internet securities highly dependent on information technology makes these securities companies and securities regulators cannot manage risk management with the traditional securities risk management system.The new characteristics of Internet securities business in terms of risks have posed serious challenges to securities regulators and securities companies themselves.In the meantime,the research in the aspect of Internet securities risk management also raises urgent needs and great hopes.Firstly,this essay makes a detail analysis of the research based on the risk management of Internet securities business in China and in the foreign country.On the one hand,the Internet Securities business is innovative business.On the other hand,the development of the Internet Securities is depend on the traditional paths.It makes the conflicts of the legal safeguard,supervisory policy and risk management.To avoid these issues above,the purpose and the content of this essay is analyzing how to do the risk management of the Internet securities business of securities companies in China effectively.Then this essay will introduce some basic theories about risk,risk management,securities risk management and Internet securities risk management.The theoretical and research methods used in this research are elaborated in detail,and the theoretical foundation is prepared for the following writing.The connotation,characteristics and particularity of the risk in Internet securities business will be clarified by comparing the characteristics of Internet securities and traditional securities business.Through the details of the current situation of risk management of Internet securities business,this essay mainly introduce the framework system of risk management of COSO-ERM integration which adopted by Internet securities.In addition,we find the issues and current situation of the risk management in Internet securities business in China by studying and analyzing the advanced experience in Internet securities risk management in developed countries.Secondly,this essay make research on the problem of Internet securities risk management that focus on how to strengthen the risk management in Internet securities.We attempt to identify and refine the key factors about influencing the Internet security risk management,which is the core and the key of this study,based on the foundation of the theoretical framework of COSO and ERM,normative legal documents about risk management issued by CSRC and China securities association(SAC).The six key factors that have been extracted have put forward thirteen hypotheses on the specific impact of Internet securities business risk management.Through the design of questionnaire,the sample collection and sorting,the reliability and validity analysis that have removed the non-applicable measure indicators,using some relevant methods to test thirteen hypotheses one by one.These hypotheses and requirements are passed and met after have completed the correlation test.The six key factors that is referred above have been found and tested.To prove the six factors how to affect the risk management of Internet Securities.Using linear regression model,we construct and test the mechanism model of the key factors on the risk management of Internet securities,the regression coefficient we got from the test to prove incidence for the key factors on the risk management.Based on the above two methods,the results of the key factors influencing the risk management of Internet securities business are consistent.As the study result shows,the six key factors,which affect Internet securities,are financial market supervision,risk management awareness,company management,technical management,legal risk management and reputation risk management.Among them,financial market supervision and risk management awareness are indirect factors;company management,technical management,legal risk management and reputation risk management are direct factors for the risk management of Internet securities business.In addition,this study observes the trading volume of Internet securities business as the object of the study,according to the situation of transaction volume to determine whether need to take the necessary measures of risk management.These measures build Bayseian inference model.In the meantime,we analyze the example to determine whether the trading volume falls within the normal range,which based on the trading volume of Internet securities business in WUXI as the study object.If find any unusual condition,we should find out the cause of the risk as soon as possible,and strengthen the risk control of Internet securities business properly.Finally,in this study,we believe that we should actively establish a two-dimension risk warning system for Internet securities business which means building the risk management system in macro level which from national level,industry level and securities itself level to reinforce the management of risk.In the meantime,the essay presents the policy in micro level that from management level,technology level,and legislation and reputation system to reinforce the management of risk.Technical management control that is found by studying is the most influencing factor in the risk management of Internet securities business.In order to provide guidance for the risk control of Internet securities business in China,the essay emphasizes on explaining and suggesting how to build the Internet securities risk management by technical management control.