iAsk: Will the most promising technologies rule the finance industry?
No one dislikes money-making tools.
Hundsun Technologies is a company that provides such tools. If China's capital market is compared to a gold mine, then Hundsun Technologies is a vendor of mining tools for gold seekers, providing all sorts of services for the financial market. As an established company with 20 years of history, Hundsun became a well-known name among investors and a leading financial IT service provider in the industry.
However, in the capital market with its roaring waves, no one can sail with the wind the whole time. In 2015, the A-share market suffered a sudden crash at its height, makingthe once-popular HOMS trading system a target of public criticism. Hundsun Technologies' subsidiary, Hundsun Network, was fined a whopping 440 million RMB due to itsviolation of off-floor financing regulation and was driven into a blind alley.
After this incident, Hundsun Technologies remained quiet for almost two years. In 2017, Hundsun made a high-profile announcement of entering the intelligent finance industry, meaning to fight its way through the technology boom and bring the company back on track. Today’s iAsk Leader is Shufeng Liu, CEO of Hundsun Technologies. Let’s look at how he plans to make a comeback against all the odds.
Gloria Ai: In the finance industry, which is more important, people or technology?
Shufeng Liu: I think that risk management is the most basic thing in finance. In the past, risk management was mostly done by people, so we can say that finance used to be a business of people. However, with the development of technology and the internet and theongoing accumulation of big data, technology will be an increasingly important force. It is a new variable. That's why people plus technology or finance plus technology has become a topic in the today's discussion of fintech. This is one of the most critical factors.
Gloria Ai: Do you think that technology will surpass people and become a more important factor in the future?
Shufeng Liu: At least so far, I haven't seen this possibility. Even though many funds are flaunting their machine learning and AI capabilities, it is still people who are conducting the financial business. Technology is a force, but I don’t think it will become a decisive force in the near future.
Gloria Ai: In the future, which will play a decisive role, technology, human nature or policy?
Shufeng Liu: I think that the role of regulatory policies is to manage and control the big picture, and ultimately, prevent systematic risks from emerging, while people act as the decisive factor, and technology is there to help people better identify risks. I think that’s the relationship among the three.
How many revolutions has the 'Chinese-style finance' gone through?
Gloria Ai: From an objective perspective, which stage of development is China's finance industry currently at?
Shufeng Liu: In fact, China's market hasshifted from high-speed development to low to medium-speed development. Its capital market has also gone from a Beta-oriented stage to an Alpha-oriented stage or a structural investment stage. This will give rise to numerous new investment philosophies and methodologies. Overall, I think we are at the beginning of a new development stage.
Gloria Ai: Based on your 20 years' experience of founding and steering Hundsun, how many revolutions have financial services gone through?
Shufeng Liu: What Hundsun has done during the past 20 years could actually represent most of the demands in fintech. I can basically divide it into three stages:During the first stage, fintech was a tool that served finance and made it more efficient. For instance, ATM is a typical technological tool.
The second stage is the stage we are at, featuring the development of the internet. The development of the internet is gradually moving the environment of financial services from offline to online. The platform of this online environment is provided by technology. That's why we talk a lot about the concept of platform nowadays.
The next stage can be called the stage of intelligent finance.By that time, technology will be part of productivity. It will promote the improvement of productivity, higher efficiency of financial services, and better risk management. We are working on all three stages at the moment.
Gloria Ai: In your opinion, where is the finance industry headed?
Shufeng Liu: We can see that there are indeed many variables and many complicated factors. However, the very core of finance is still risk management, namely, how to accurately identify risks and properly manage them; and on top of risk identification, we also need to consider the risks of various assets and the risk appetites of different investors.
In terms of asset management, it is about allocating the proper amount of risks to the right person. I think that proper risk allocation is the most basic and the most fundamental. If you violate this principle, it will be problematic. So I think that the most important basic principal is proper risk allocation.
Gloria Ai: In the next 10 years, what will be Hundsun Technologies' mission?
Shufeng Liu: Hundsun is a fintech company that serves the financial industry with technology. I think that in the next 10 years, we will continue to do what we are doing. This is our positioning. Today, we can see that big data, cloud computing and AI are rapidly increasing our productivity, so in the next 10 years, we are going to remain on the frontier of technological progress, and continue to serve and empower the finance industry by leveraging innovative technologies. This will be our mission.