Yi Gang, governor of the People's Bank of China, the central bank, on Nov 3 urged better international coordination to protect personal data, especially in areas like antitrust, data regulation and consumer protection.

The legislative, judicial and administrative bodies in various countries should join hands to promote the standard setting process for personal data protection, given the rapid cross-sector and cross-regional development of financial technologies or fintech, Yi said in his keynote address via video to a forum of the 2021 Hong Kong Fintech Week.

The PBOC has been focusing on cracking down on excessive collection of consumer data and "unfair clauses" outlined by fintech companies, which require consumers to provide personal information in exchange for accessing financial services, Yi said.

Under the current regulatory framework, financial institutions in China are required to collect, use and store information following the principle of "minimum necessity" and in accordance with laws.

They should protect the privacy of individuals when using personal information for commercial purposes, Yi said.

In order to protect personal credit information, Chinese financial regulators have required fintech companies to isolate their personal credit information business units. Financial institutions are allowed to provide such services only after they receive licenses.

"Some Big Tech companies have either collected data without permission or misused them. There are also cases of customer data leakage. Therefore, it is urgent to strengthen personal data protection," the PBOC governor said at the forum.

"The ultimate purpose for data protection is to promote its proper usage," said Yi. "On the premise of protecting personal privacy, we will try to define data ownership in a more accurate manner, facilitate data transactions and promote fairer use of data to unleash the vitality and innovation capacity of market players."

Zhang Xiaohui, dean of the Tsinghua University PBC School of Finance and former assistant to the central bank governor, said last month at the 2021 Bund Summit in Shanghai that China still faces challenges in data governance at present, like excessive data collection by large technology companies that might violate the data privacy of customers.

Chinese regulators could refer to the practice of their peers in the European Union and strive to balance the relationship between privacy protection and fair use in data governance, said Zhang.

The boundaries of data as private goods, quasi-public goods and public goods should be distinguished, and also clarify the multiplicity of various kinds of data and the possible systemic risks. And social effects of cross-border use of data should also be clarified, she said.

As other major central banks are considering tighter scrutiny of cloud computing services offered by technology companies to banks, the PBOC and the nation's banking and insurance regulatory body are discussing how to build a special cloud computing and data center for the financial sector in the country.

Meanwhile, the banking regulator requires major State-owned commercial banks to offer free fintech services to city and rural commercial banks, the former PBOC official said at the Shanghai event.

China promulgated the Data Security Law and the Personal Information Protection Law in June and August, respectively, creating a legal framework for personal data protection.

In addition, on Sept 30, the PBOC issued the Administrative Guideline for the Credit Information Business, which defines personal credit information and regulates the credit information business, from data collection to processing and sharing.

Huang Yiping, director of the Institute of Digital Finance at Peking University in Beijing, said the Chinese government has taken many measures to improve the market order of the digital economy, including better supervision of fintech companies.

There should be a balance between financial stability and innovation, and the target should be set to promote the orderly development of financial and technology industries, Huang said.