The Study Of The Issue In China’s Internet-bank Supervision

On October1995, the first American online bank——“Security First Network Bank” setup, ensued with other banks announcing their online banking service. After20years’development and upgrade, internet banking has been a basic service for commercialbanks.China’s internet banking started in1996. It goes not well as first but rapidly grows after2000with every commercial banks providing internet banking service in succession. With thehigh speed development of internet platform, internet banking also grows fast. In2011, onlinepayment is the most important payment because of the fast growing of e-commerce. Banksinnovate their online banking service, providing more convenient and personalized products inorder to control more market shares and get higher market position.Nevertheless, the regulation for online banking lagged compared with the growing speedof it. Online banking has its specific issue of security and risk as it’s distinct from traditionalbanking service, this is a trouble we need to deal with, and regulation should be enforced. So,analyzing the status quo of internet banking as well as making efficient suggestions has itsnecessity.This paper begins with analyzing the condition of development and regulation of domesticinternet banking, pointing out regulation loopholes and deficiencies such as the imperfection ofregulation legal system, the fall behind of means for regulation, bad coordination betweendepartment and lack of information disclosure system. At the last two section of thedissertation, I give advice on perfecting China’s internet banking services consideringadvanced experience abroad. By practicing it, I believe we could not only control business riskbut more significantly prompt the healthy development of internet banking.With qualitative and quantitative analysis, the result of this study is as follows:1、Risks of network bank are increasing. The main risks are as follows: Firstly, absence ofnetwork banks supervision. Secondly, lag in consciousness of internet banking’s supervision.Thirdly, fragility of human resource. Fourthly, hysteresis in law and rules and measures ofsupervision of internet banking. Fifthly, serious lag in social supervision environment.2、Huge difficulty in supervision of internet banking.Firstly, Online banking financialelectronic financial risk to bring new features, the impact of the identified risks of thetraditional banking sector to a large extent, measurement and control instruments. Secondly,the traditional regulatory approach will fail to increase the internal control system of bankinginstitutions regulatory requirements. Thirdly, existing regulatory means failure. Articles with built SOMEI analysis paradigm online banking supervision system, namelythe regulatory body S (subject), the regulatory object O (object), regulatory means M (meansand methods), environmental factors E (environment), information structure I (informationstructure) analysis paradigm. Each of these five aspects of online banking regulators toanalyze the problems. Doing so makes the question of regulation is more clear, coherentclearer. In the final chapter of the article, the policy proposals put forward our online bankingrisk governance model built from the macro and micro levels.