Financial Regulators Ask Ant Group to Go Back" and Focus on Its "Origi...

Financial Regulators Ask Ant Group to Go Back" and Focus on Its "Original" Payments Services- PingWest

Financial Regulators Ask Ant Group to Go Back" and Focus on Its "Original" Payments Services

December 29, 2020 3:58 am

Beijing (PingWest)—Alibaba's affiliated fintech company Ant Group defied regulations and used its market-leading power to squeeze competition and hurt consumers, China's authorities said in a statement released on Dec. 27 after summoning the company for a talk.

On Saturday, the People's Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange summoned Ant Group, pointing out its violation of rules and requiring it to conduct business rectification in multiple areas.

Financial regulators also urge the company to increase the transparency of business transactions, avoid unfair competition, and obtain permits to operate personal credit business. Ant has also been asked to rectify its financial operations in the areas of loans, insurance and wealth management.

In a Q&A statement with the media on Sunday, Pan Gongsheng, deputy head of the central bank, suggested that Beijing wants Ant Group to overhaul its operations. Regulators told the company should return to its beginnings as a payments service provider, protect personal data privacy in its credit-scoring services, and set up a financial holding company to ensure capital sufficiency.

The official said that the company had also "had incomplete corporate governance mechanism, used market advantage to exclude industry operators and harmed consumers' legitimate rights,"

Ant Group must be aware of the severity and necessity of restructuring its businesses, and come up with a rectifying plan and timetable as soon as possible, said Pan.

The fintech company responded on Sunday that it will establish a working group under the guidance of regulators and implement the requirements raised at the meeting.

"Ant Group will comply strictly with regulatory requirements, focusing on serving the real economy and the people as the core of our business," the company said in a statement. "We will firmly uphold market-driven and law-based principles, and work to improve our corporate governance, review relevant businesses and process, and enhance awareness of and ability to comply with relevant laws and regulations."

The company also vowed not to place "additional costs" on consumers and partners such as financial institutions.

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