Exploring On Means Of Banking Regulation In The Era Of Big Data

The Big Data era has come quietly. McKinsey said:" data has penetrated into various aspects of public and private areas of our society, and it has become an important factor of production. The using of massive data mining heralded the arrival of a new trend of productivity growth and consumer surplus." Harvard University sociology professor Gary King said:"this is a revolution that the quantization process begins in all areas including academic, business and governmental." Examples of the capitalization on massive data mining are legion: they can be found not only in internet companies such as Google, Baidu, Alibaba or Tencent, but also in stocks exchanges, banks, and hedge fund in Wall Street, as well as the CDC (Centers for Disease Control and Prevention), Presidential elections, and the PRISM program."Data is the new oil", Amazon’s former chief scientist Andrews Waynes said.In the pre-Internet era, banking sector was one of the industries that had the largest data storage.In the era of the Internet and the Internet of Things, one of the hallmarks of big data is that it generally has lower proportionate value. However, the banking industry has massive internal, industry-specific and expandable external data, which has comparatively higher proportionate value to be exploited.Currently, the nation’s largest banks generally have100TB-level data storage.In Sichuan province, local banking institutions that have relatively higher level of information technology implementation (other than new rural financial institutions) also have data storage and annual data increment at the TB level. With the advent of mobile internet into the banking industry, the development of banking data will continue to accelerate.Empirical evidence from domestic and foreign banks’practice shows that, banks that focus on data integration, quality control and application analysis are more likely to achieve proper core competitiveness in the era of big data. Currently, some Sichuan banks have realized the importance of data and have begun working on the planning or carrying out of data utilization, although there are still many banks that lack an understanding of the importance of data.With the impacts from further economic reform, the freeing up of interest rate, the pilot in-depth financial reform, online banking, and third-party payment systems, it is not suprising that the competitive dynamics of the financial market is undergoing profound changes. Meanwhile, the continuing growth of the size of bank assets, the number and types of banking institutions, and the instant consummation of financial transactions, as well as the emergence of countless novel financial products, all add up to the overall business risks. Moreover, risks inherent in off-balance sheet transactions and the mixed operation of retail and investment banking will further increase cross-agency, cross-market and cross-space damages when crisis occurs. To use big data to properly respond to these new challenges may worth more attention and thinking.This paper is based on the designing, implementation, promotion and application of CBRC Sichuan Office’s MAST project (Monitoring and Analysis System Technology). This article examines the challenge of banking regulation and risk management in the era of big data and also describes the theory of banking regulation, particularly the practice of off-site supervision, which played a supporting role in the theories of regulation. This article focused on the application of the MSAT system, the data governance and the regulatory impact on banking regulation in the era of big data:Firstly, the development and exploration of regulatory means. Secondly, the design, construction and application of the MAST project--how to innovate technology and methods to ensure that the regulatory authorities may adequately cope with the challenges with limited funds and human resources in the era of big data and in the face of rapid development of banks. Thirdly, discussions of MAST’s features on data sharing and risk management. Fourthly, data governance and the evaluation of data maturity from MAST’s vantage point. Fifthly, in the big data era where macro and micro regulations should be more sensitive and prudential, how to meet the requirements for timely massive data analysis and comprehensive risk situational awareness, so as to improve banking regulation in a proactive and authoritative manner. This article chooses local banking institutions in Sichuan province as samples for MAST project study. This article illustrates the designing concept and application of the MAST program, and tries to apply these concepts to achieve comprehensive banking regulation.