Recently, the Guangming Daily published an article "Giving Full Play to the Important Role of Policy Finance in Stable Growth". The article pointed out that at present, policy financial institutions should combine support for resuming production and expanding domestic demand, increase the credit resource tilt, and help achieve the dual goals of short-term stable growth and long-term economic high-quality development. Make full use of financial technology such as blockchain, big data, cloud computing, etc., improve the risk internal control mechanism, increase the provision for bad debts properly, ensure the stability of asset quality, and maintain the stability of the financial system.
The use of financial technology to improve the efficiency of financial infrastructure has always been the goal and direction of financial institutions.
Relying on the "Jianrong Zhihe" cross-border matching platform, CCB Nanchang Branch completed the first cross-border matching business of anti-epidemic materials exports after overcoming difficulties such as route suspension and local market access, and assisted medical device manufacturers in the province 108,000 disposable medical masks went to sea smoothly. Relying on the complete Internet + bank-enterprise financial blockchain and ecological circle, "Jianrong Zhihe" provides all-round financial services such as credit loan services, fund custody, guarantee services, and risk management for the settled enterprises.
As one of the most challenging innovations in the field of financial technology (Fintech), blockchain has fundamentally subverted the inherent logic, operating mode and business scope of traditional finance, broke through the limitations of the numerous rules and regulations that have been established, and entered the previous A series of completely new application areas that cannot be involved.
1. What are the internal control risks of financial institutions represented by banks?
According to statistics disclosed on the website of the China Banking Regulatory Commission, in the whole of 2019, the number of bank fines was 1,531 (banking leases were not included), and the total amount of fines reached 808 million. Overall, the number and amount of fines are positively related to the scale of operations. The focus of the punishment is mainly on the management level of loan business such as illegal loans, inadequate three-loan loans, and the misappropriation of loan funds. Looking at the details of the violations, a large number of violations exist in real estate loan financing and credit funds flowing into the stock market.
The internal control of banks is undoubtedly the most complete and formal among financial institutions, but even then its effectiveness will face "failures" again and again. The important reasons are:
1. There are branches, sub-branches, and business outlets in the bank. Each branch or branch has about 20 to 30 departments. The responsibilities and regulations of these departments are scattered and difficult to integrate. The rapid development of Internet finance and banking innovation business For internal control managers, it presents no small challenge, and it is impossible to achieve embedded internal control management of all doors, all services, and all processes;
2. In addition to individual important customers and businesses, banking business is basically handled by branches and sub-branches and business outlets. These basic managers and heads of institutions have considerable power, information is asymmetric between each other, and internal management is difficult to involve , Leading to "collusion inside and outside".
2. How can the blockchain improve the internal risk control mechanism of financial institutions?
Blockchain, as the underlying technology of Bitcoin, appeared in front of everyone as a financial technology. Its characteristics such as peer-to-peer, decentralization, and smart contracts can solve some of the stubborn diseases of internal control of financial institutions. The internal control system brings new research directions.
1. Real-time synchronization of information under blockchain technology can quickly identify internal control risks
Considering the multi-department and multi-node corporate structure of financial institutions, it is difficult to obtain information in a timely manner, which will cause internal control managers to fail to identify related risks in a timely manner. The peer-to-peer transmission of blockchain technology can enable the computer of each node to share the entire network in real time. Relevant information materials of other nodes' computers can achieve real-time information acquisition and timely identification of risks. At the same time, the decentralization of blockchain and smart contracts can also reduce the risks caused by a part of "human factors" in the business process, and is a tool for intelligent identification of risks Lay a certain foundation.
2. The authenticity and reliability of data under blockchain technology can strengthen the internal control level of financial institutions
Blockchain technology can ensure the authenticity of stored data, and any change records will also be stored. These data can not only provide reference data for accurate evaluation of internal control, but also effectively improve the efficiency of the controller, help the controller study the past history, and optimize Control process to achieve more accurate risk prevention.
3. Blockchain technology will promote financial institution system upgrade
Blockchain technology is one of the central bank's digital currency selection directions. Whether it is internal control, accounting supervision, or internal audit, the application of blockchain technology in the financial industry is an inevitable trend. The advancement of digital currency will inevitably bring new challenges and opportunities to financial institution systems. Considering the difference between the blockchain technology architecture and the underlying structure of existing financial institutions, financial institution systems also need to be optimized and upgraded in order to better respond. New business risks and new internal control risks.
Financial institutions have always attached great importance to the improvement of internal control institutions. In terms of organizational structure, they have set up internal control departments and positions, and have also formulated internal control supporting system processes in terms of institutional mechanisms. They also invest huge amounts of money in IT and big data every year In addition to conventional methods, advanced technologies such as cloud computing and cloud computing have improved the level of internal control. Blockchain technology has proposed a new direction for improving the risk internal control mechanism of financial institutions.
Blockchain is called a disruptive technology and will reconstruct the key underlying infrastructure of Internet finance and the entire financial industry. We believe that more value of blockchain in the financial field is waiting for people to discover.
The development of blockchain technology has gradually matured, but there are still some technical and cognitive thresholds at the practical level.
DREP is committed to creating "connectors" and "toolboxes" based on blockchain technology, providing solutions that combine flexibility, ease of use, and userlessness, which can effectively help financial institutions build on blockchain technology. Improve the internal control system to help financial institutions improve their internal control and achieve technological upgrades.
