Digital transformation, strengthening of financial supervision, data security legislation…In this era, regulatory compliance tech companies are growing strongly in China.
According to statistics, there were about 120 financial regulatory policy releasing in the first quarter of 2021 (not limited to specific policy documents), of which 30 were from central banks. 40 from China Banking and Insurance Regulatory Commission, 35 from China Securities Regulatory Commission and 15 from others. And the overall policy tone is strict (compared with the same period last year). Financial regulation in 2021 kicked off with an "iron-fist".
More and more companies desire to use latest technology to serve their own regulatory compliance needs. Focusing on these needs, many start-ups provide more data and effective solutions for regulatory compliance, with the goal of simplifying and optimizing the management activities of legal compliance, risk, financial statements, and data. Such companies are called regtech companies, which belong to a larger group - fintech companies.
The relevant data shows that a total of 317 regtech companies have received more than 2.3 billion US dollars in funding in the past five years. These regtech start-ups cover financial services, such as supplier risk management, cyber security, environmental protection and many other fields.
Under this background, the Nanjing Oversubscription Digital Technology Co, Ltd. came into being. In the face of the changing regulation environment, private, brokers, banks and other finance institutions see the compliance costs and labor costs increasingly heavy. As a solution provider, Nanjing Oversubscription Digital Technology Co, Ltd combines artificial intelligence, blockchain, cloud and big data to help transaction monitoring, auditing for finance institutions, so as to reduce costs, enhance regulatory compliance, and improve process efficiency. FOF Global has an exclusive conversation with Mr. Yang Xiuyi, CEO of Oversubscription Digital, to interpret the story behind Nanjing Oversubscription Digital Technology.
"Nanjing Oversubscription Digital Technology Co, Ltd is deployed ahead of time. At the moment when future supervision is proposed, I think we will have a more mature solution to respond."
FOF Global: Would you please briefly introduce Nanjing Oversubscription Digital Technology, including the main products and services it provides.
Xiuyi Yang: Nanjing Oversubscription Digital Technology focuses on technical solutions for regulatory compliance in the entire financial industry.
In the initial stage, we focus on regulatory compliance in private equity investment. When the underlying technology develops and the client group expands, we will slowly step forward to serve other licensed financial institutions, such as securities companies, banks, etc. But at present, our products are all related to private equity institutions and they are listed as follows:
The first is our virtual cloud disk (VDR) product, which mainly provides data security and privacy for investment managers' fund-raising and their portfolio companies' financing processes. It has functions such as giving different level of permissions to different characters, adding digital encryption watermarks with one click, sharing WeChat limited-time invitation links, and blockchain tracing;
The second is a supportive tool in audit. It's an intelligent platform for due diligence and audit, and provides intelligent analysis of "invoice-level granularity" data. It provides financial analysis and risk control system for enterprises and investment institutions to improve the level of enterprise internal control and risk monitoring;
The third is an AI compliance assistant for private equity funds. It synthesizes public data from private equity fund regulators, legal authority's supervision and punishment data, case data, etc. by using AI semantic analysis and mapping knowledge domain technology. Then, cross-dimensional content query, association and analysis can be realized. It provides an "AI brains" for industry compliance regulators to help improve work accuracy and efficiency.
Relying on Beijing's well-known private equity industry media platform, we can cover a certain number of industry customers. At the same time, we have also formed a technical team from Huawei and the research and development team of Nanjing University's Institute of Intelligence Research. This project combines industry resources, professional cognition and innovation technology.
FOF Global: How does the current product line obtain data and ensure data security?
Xiuyi Yang: The virtual cloud disk has selected two leading public cloud partners, Alibaba Cloud and Amazon AWS, respectively, and also chose to provide top-level technology and other product services for the most head enterprises. Some customers, such as government-led funds, have higher requirements for data security, we provide privatization deployment options, and data can be deployed on their own servers to ensure data storage and security.
Financial audit gadget. In the adjustment process, the data is directly used for analysis, only the analysis results are retained, and the financial data of the intermediate process are not retained. The analysis results are not online, but only give Party A and us to do the audit together. Some enterprises whose financial ticket data have been adjusted are incomplete, and after obtaining the ticket data through our technical means, they will have to go to his financial information to support and analyze it, including the input and outlet invoice data at the sales and purchase ends. This full-financial voucher coverage is much higher than the top four audit institutions at present.
The data source of product AI compliance assistants is mainly two aspects, one is static data, that is, regulatory texts such as laws and regulations; the other is dynamic data, that is, the problems and answers encountered by everyone in the process of compliance, everyone is concerned about. Which questions, which answers are universally accepted, etc.
In addition, domestic headline network security enterprises will provide us with product testing and security support. They find out our product vulnerabilities through technical means, and then give technical solutions to make our products more complete and safer.
"I believe that in the process of China's rise, strong financial forces will also emerge, playing a more important role in the world. So I began to want to return to the financial industry, the industry with capital and cutting-edge technology application opportunities."
FOF Global: It's understood that you graduated from Nanyang University of Technology in Singapore. As an excellent master's degree in science, technology and innovation management, he exchanged studies at Stanford University in the United States. He was once the risk consulting project manager of Deloitte. He was an assistant to the chairman of an information-based service listed company. The career path is very successful. Why did you choose to start your own business from scratch?
Xiuyi Yang: Entrepreneurship is part of my personal planning. My past work experience is to serve my future career.
The first work has been done for several years in the field of Internet transformation and industrial digital upgrading, and later went to four major Deloitte risk consulting. Through the project experience, it has accumulated relevant knowledge about the strategy, organization, control, manpower, finance and other aspects of the enterprise, and deeply and completely understand the system and architecture of the whole enterprise. The experience accumulated as a project manager covers the entire domestic business ecology, from start-up, growth-oriented, Pre-IPO, listed companies to multinational enterprises, which gives me my own ideas on the development of different business organizations.
Later, I went to Hong Kong as the chairman's business assistant for listed companies. That is a company engaged in informatization and supply chain finance, with annual operating revenue of about 80 billion Hong Kong dollars. In 2018, China and the United States began a trade war, when the company's capital pledge turnover and product profit margin began to be problematic. This thing actually gives me a great shock and touch.
There is just an opportunity node. The domestic financial supervision environment has changed, and there are window opportunities in the field of compliance control, but the digitalization and professional level of the industry is not high, but these aspects are exactly the fields I used to be familiar with. So I resolutely choose to start a business, hoping to use capital and cutting-edge technology to create value and service industries through past accumulation.
''This venture is to integrate Singapore's advanced concept with a global perspective and integrate the cutting-edge technology into China's vast financial service market.''
FOF Global: It is reported that Singapore Nanjing Ecological Technology Island, where the over-raising technology project has been settled, is selected on what basis?
Xiuyi Yang: We researched the well-distributed data of domestic investment and financing institutions. Shanghai, Beijing, Jiangsu and Zhejiang are ranked in the top five, of which Jiangsu private equity funds are at the top. Our customers are here, which will bring us closer to the market. Nanjing has unique conditions for dense universities and many talents.
In addition, I graduated from Nanyang Technological Engineering of Singapore. Now Nanjing and Singapore have a joint venture science and technology innovation center called Nanjing Jiangdao Science and Technology Innovation Center. The island is jointly promoted by the Jiangsu Provincial Party Committee, the provincial government and the Ministry of Trade and Industry of Singapore. A comprehensive cooperation project jointly developed and built by Singapore and Nanjing is the Singapore-Jang. Important regional foreign economic cooperation projects under the framework of the Soviet Cooperation Council. We have also set up an office in Singapore and an incubator in the field of financial technology.
Nanjing University and the National University of Singapore have established the Linguistic Intelligence and Knowledge Engineering Research, Nanjing China (Like Research), which is also our shareholder. This research institute undertakes the cutting-edge artificial intelligence technology of Nanjing University, so that the commercial application of core technology can find a good entry and integration point with us. In addition, it also has the background of scientific research resources of the State of Singapore and Nanyang Technological Engineering of Singapore.
In addition to Nanjing, the alternative cities are Wuhan, Shenzhen and Xi'an, which will be the cities we will mainly promote in the next stage.
FOF Global: What resources or help can Singapore provide?
Xiuyi Yang: Singapore is one of the best financial centers in the world. The financial supervision system is relatively sound and the concept is advanced. It is an important example for countries to learn from. Singapore's financial companies are also technologically and data-driven.
Technically, there is no much worse at home than abroad. On the basis of the already available technical capabilities, it is more to see the future trend of our product or service form. In this entrepreneurship, we hope to learn from and introduce Singapore's ideas, application methods and product forms. Apply the advanced concept with a global perspective and integrate the cutting-edge technology into China's vast financial services market.
Of course, Singapore is a bridgehead for future enterprise internationalization. When the business has reached a certain stage, we also hope to have its own development opportunities in Singapore, Southeast Asia and the Belt and Road Initiative. Over the past few decades, other countries have formed a stable global network and influence in the financial field. I believe that in the process of China's rise, excellent financial services and technology companies will also emerge, playing a more important role globally.
FOF Global: Let us introduce the current shareholders of Nanjing Oversubscription Digital Technology?
Xiuyi Yang: In fact, we still know our strengths and weaknesses very well. The first is the technical problem, and the second is the realization of engineering.
At the beginning of the establishment of Nanjing Oversubscription Digital Technology . Linguistic Intelligence and Knowledge Engineering Research, Nanjing China was introduced as a strategic shareholder. Solve our first problem. they have very cutting-edge artificial intelligence research and development capabilities and technologies.
The second is how to turn technology into products and solutions. We have found a technical R&D team in Nanjing as the founding shareholder, composed of senior developers and technicians who have more than 15 years of work experience in Huawei and national informatization enterprises.
In addition, a Singapore-based regtech company will become our shareholder. Last year, they received S$2 million in financing. That company also feels that this service model has large market in both Singapore and China.
We also want to cooperate further in underlying technology, sales channel and staff teams in the future.
FOF Global: What insights do you have into the Nanjing Oversubscription Digital Technology Co, Ltd and the financial industry?
Xiuyi Yang: I believe that the domestic financial industry, including the investment environment, will get better and better. Before this great development, a sound, mature, perfect and controllable regulatory mechanism is needed, and the relevant institutions in the financial industry will pay more and more attention to compliance, so that finance can better industrial progress and achieve the country's economic development.
In the short term, there will be a relatively rapid increase in domestic demand in the financial and regulatory fields. An imaginative entrepreneurial opportunity is nurtured behind rapid growth.