(Yicai Global) March 10 -- Fintech is promoting the development of green finance in China, but challenges such as the inconsistency of green standards and the poor quality of environmental data still persist, concludes a joint study whose results the University of Chicago's Paulson Institute and the Research Center for Green Finance Development at Beijing's prestigious Tsinghua University recently released.
The report, titled 'Fintech Facilitates the Sustainable Development of Green Finance,' which appeared on March 8, features case studies of four Chinese entities using fintech applications to promote sustainable development. The solutions in these cases are all supported by powerful, emerging technologies like blockchain, Big Data, cloud computing and artificial intelligence that are catalyzing a digital transformation, which when applied in the finance sector is commonly known as financial technology, or fintech. It is a potent propellant for promoting greater green behavior.
Among fintech's advantages are increased efficiency and transparency. The case studies of the green finance one-stop service platform in Huzhou in eastern Zhejiang province and the People's Insurance Company of China Property and Casualty Remote Damage Assessment and Claim Settlement System for Catastrophe Insurance illustrate how these entities are using the new financing model's advantages to fill gaps for small and medium enterprises, green financing and disaster-affected claimants. Its one-stop service platform has helped more than 13,000 green SMEs secure credit, and the PICC propertty and casualty's settlement platform can pay claims in as quickly as four days.
In another case study, the People's Bank of China launched a green finance information System in Huzhou, a manufacturing hub about an hour by car southwest of Shanghai, that connected all 36 banks in the city's jurisdiction with the central bank's local branch to report every green transaction in real-time to the PBOC's local office, which allows for the more accurate collection, management, and review of green lending information from the banks within the study area.
"The cases highlighted in this study show how fintech can be harnessed to develop innovative green finance tools. These tools can be scaled across China, but also in countries -- particularly emerging markets -- that are adopting fintech as well as seeking means to finance their sustainability goals," said Deborah Lehr, vice chair and executive director of the Paulson Institute. "Green finance and the environment will clearly benefit from these new innovative projects," she added.
"Fintech can effectively improve green identification, lower the cost of green certification, and reduce the cost of financing small-medium businesses and green consumption as well as the cost of trading green assets," said Dr. Ma Jun, chairman of the Green Finance Committee of the China Society for Finance and Banking and Director of the Research Center for Green Finance Development at Tsinghua. "The market potential is tremendous," Ma continued.
Editor: Ben Armour