China is poised to leapfrog developed nations and is emerging as the world’s fintech market leader, as evidenced by the spectacular growth in its fintech investments. Numbers speak for themselves—by the end of 2017, China boasts of 164 unicorns with a total estimated value of $628.4 billion. The top 14 are all super unicorns, most of which are fintech unicorns.

2018 is also a blockbuster year for Chinese “unicorns” or billion dollar companies as they invade U.S. and Hong Kong capital markets for IPOs.

Digital economy is a buzzword that fuels China’s economy since 2016 and saw the birth of many Chinese unicorns. The market is also bolstered by large government support for innovation.

For Chinese fintech unicorns, opportunities abound amidst challenges. Cybersecurity and data compliance have never been more important. 

King & Wood Mallesons is one of the earliest firms that focuses on cybersecurity and data compliance, and has the largest team in this regard. 

“The beginning is always the hardest. When data becomes their core asset, the priority alternates to the realisation of digital asset value. We, as lawyers, have the responsibility to assist our clients to realize the value of their data asset. Simply put, compliance creates value. If the former data has flaws, the asset has flaws accordingly, the business model will lose a solid foundation and all will go down in no time,” says Susan Ning, senior partner of King & Wood Mallesons.

For Fintech unicorns, they must refresh their notion about the role of compliance it plays to the key success of their business and stops putting compliance in the back burner like the prevailing practice most companies adopt. “It is also important to understand that the flexibility of digital commercialisation will be key to the extent their success which they would like to attain,” Susan Ning adds.

“Sometimes we were even involved in their IPO negotiations as compliance is indispensable to a successful IPO," says Leon Liu, partner of MWE China Law Offices.

“Fintech unicorns tend to have legal service demands primarily in four segments: regulatory advice, capital markets & IPO, M&A and IP. Regulatory advice tops the list as the financial industry has always been heavily regulated,” says Fang Liu, partner of Clifford Chance.

 “Their legal demands will also involve cross-border data transfer, data security and information management, data breach crisis management, etc. Once crisis happens, they will be doomed,” says Leon Liu. 

THE FUTURE IS HERE

Fintech firms might touch many sectors like internet finance, consumer lending, investments, funding, etc. They collect data generated from each sector respectively and these collected data will be like an “isolated data island”. That would be non-compliant if those fintech unicorns break this “isolation” to present a digital profile or a credit report for users in the form of data marketing as the use of data in the first place is not authorised by users.

But seeing in a long-term, those fintech companies need to capitalise on these data by establishing connection of them. It is the responsibility of lawyers to help design the model thus justifying the connections between these data. This is to ensure the sufficient flexibility of commercialising digital data assets in the future. 

According to Susan Ning, fintech unicorns represent a future of the economy. The performance of the economy depends on how compliant their digital assets are, and the way of commercialising their digital assets. 

“The future is here. Data is undoubtedly the core and soul of the future economy. We need to foresee the future of commercialising digital assets and before that, we help fintech clients with a proper business model. Based on the authorised data, we help them identify the scope of the authorisation and justify the utilization accordingly,” Susan Ning says.

Susan Ning told ALB that, there are quite a few law firms in China that can help fintech clients readjusting their business mode in accordance with data compliance. Many firms in this practice still need  sufficient understanding of data economy. KWM is a leading law firm with a global vision that enables it to provide the best solution, with a systematic and multidimensional approach, that is in line with the economic trends and legislative developments. 

Another key issue for commercialising data assets is to explore new markets. For fintech unicorns, technology serves as a tool, finance is just a form, data is their asset, so when all sizable data building up together into something bigger that would be revolutionary--Data defines all, or rather, new markets are data-oriented, Susan Ning emphasized.

“Fintech unicorns enjoy high-profit margins, fast growth rate, and make a significant impact. Their innovative business model and their products rely on the so-called ABC. A stands for Artificial Intelligence, B stands for Big Data, and C stands for Cloud computing. Data is essential to develop ABC,” Leon Liu pointed out.

 “Presently, the fintech market is growing at a very fast pace and the regulators have to strike a balance between the risk management and potential benefits of fintech development, so this can play a role ultimately in supporting the real economy. After China's P2P industry exposed huge risks in the country, the CBRC has tightened its supervision. But only those who are not compliant are now out of the market. Overall speaking, the development of the entire fintech industry is very promising in China, although in the short term, the Chinese regulatory authorities seem to be quite selective in issuing relevant licenses for fintech businesses such as the Internet banking, also known as virtual banking licenses in Hong Kong."  Fang Liu pointed out. 

According to Hong Kong Monetary Authority, it has received a total of 29 applications for the virtual bank licenses by the end of August this year, including Tencent, Ant Financial, JD finance, Xiaomi finance, Pingan Insurance, etc. Hong Kong has played supportive role for the development of fintech by encouraging more fintech firms to set up virtual banks in Hong Kong. 

Fang Liu told ALB that Clifford Chance is one of the few law firms which can assist fintech clients with applying for their virtual bank licenses in Hong Kong. 

Will this Hong Kong policy lessen the interest in fintech unicorns to the mainland market?

Susan Ning says, “What the market could offer to enterprises is the key. The Hong Kong policy will only help the development of Chinese mainland fintech companies as most of them are no longer rooted in one place. They are more likely to do their technology research, fund setting-up, IPO in different places but their product will be in China as China has the biggest market. The more advanced the finance infrastructure in those markets is, more favourable to the development of Chinese mainland fintech companies.”

When it comes to the number of fintech unicorns, China is not equal to the U.S., but when it comes to the estimated value, China is twice than that of the U.S. China is emerging as a kingdom of fintech unicorns, although there is much more for China to bridge the gap such as the maturity of financial market, the variety of derivatives, the stability and flexibility of the market, and technology. 

“China has a fertile ground for innovation in fintech as the government is very supportive to the development of innovative technologies like AI and Blockchain, and China’s digital infrastructure and big data is quite leading in the world, all these, in turn, are favourable for better and fast development of new technology in China. Many fintech unicorns are calling China home as everything here is fintech-friendly then they can be better prepared to extend their global reach,” Susan Ning points out.

 “Many fintech unicorns are still focused on the domestic market. With their accelerated expansion into Europe, these fintech unicorns will be increasingly exposed to GDPR regulation, “ Fang Liu adds. 

OPPORTUNITY IN DISGUISE

Fintech clients took up 20-30 percent of KWM’s cybersecurity and data compliance work. The number of fintech clients reached more than 25 in 2018. 

 “There are increasing numbers of fintech firms realizing they couldn’t do without cybersecurity and data compliance. This is tough because data compliance in fintech is new to us too. In the meantime, this also presents opportunities. We help them with both the current compliance issues as well as correcting previous non-compliant issues,” Susan Ning says.

Given the fintech regulatory landscape is not entirely clear in China, it is not surprising that this poses many challenges for law firms.

As one of the leading law firms on data compliance, what KWM provides is to do a “compliance health check” for their fintech clients. Comparing to the earlier face-to-face talk with clients, by teaming up with KWM’s legal tech incubator Legal Miner, one of the pioneering legal analytics and intelligent search services in China, this ‘compliance health check’ is using technology-based solutions that incorporate big data and AI turned out to be much more efficient and effective by producing a score of risk analysis. KWM also work with many legal tech providers to offer the best solution that guarantees it is technologically feasible, commercially wise, and legally compliant. 

MWE China is the first law firm in China that explored digital solutions in legal service with an emphasis on digital evidence analysis. The firm is well prepared in digital legal service by entering an alliance with McDermott & Will & Emery to provide Data Due Diligence (DDD) by the new hires of technology consultant, by establishing strategic cooperation with BAT-alike companies to share the pool of technology, product, standard, models, etc. 

“The most challenging issue is to provide a feasible solution that combines compliance advice, commercial insight, and technology consultancy,” says Leon Liu.

 “Chinese companies were not attaching importance to compliance in the past decades but now the change is happening as there are increasingly Chinese fintech firms going global and their legal demands for data compliance is a ‘new normal’.  Another change happened is in the scope of the application of laws. No matter how sophisticated a litigation is, it would cover multiple jurisdictions at most. While in the case of data compliance, it is global in nature. Therefore it is a must for law firms with global vision, global expertise and global resources,” says Leon Liu. 

It is an irresistible trend for data flow on a global level but in the meantime, the legislations in this regard are conflicting with one another. The challenges for data compliance lawyers are to provide legal service with a global vision to take all involved jurisdictions into consideration and help fintech firms to design their cross-border data flow against a global context. 

“KWM provides one-stop solution that unites our global network. We help our fintech clients to avoid any impacts when conflicting legislations in multiple jurisdictions would disrupt their data flow and their business models by giving them a comprehensive advice from both perspectives of legal and business. One-stop service under one roof by the firm proved to be most effective as our team treat the issues at par and provides professional approach,” Susan Ning says.

 “We help clients do calculations of the risks and potential benefits and help them manage to achieve their success by taking calculated risks, kind of like walking on a tightrope but never falling off.  Although the fintech regulatory landscape in China is developing, this offers us great opportunities to witness the development in the sector. These insights will in turn allow us to better serve fintech companies,” Fang Liu says.

“Clifford Chance is well positioned to meet the needs of fintech unicorns as we are traditionally strong in serving financial institutions and we have one of the broadest practices of any international firm in Mainland China that covers all their legal demands in their development,” Fang Liu adds.

中国：领跑金融科技

金融科技在中国风生水起，金融科技类案件呈激增势头，中国的金融科技律师们开始应接不暇。

中国在金融科技领域弯道超车，成就瞩目，正在成为全球金融科技的领军者。几组数字是最好的例证：截止2017年底，中国共有164家独角兽企业，总估值6284亿美元，排名前14的独角兽企业估值均超过80亿美元，其中金融科技又是诞生独角兽最多的‘赛道’。

2018年也是金融科技企业大举进军资本市场的一年：很多独角兽企业选择到美国和香港上市。

2016年开始，数字经济开始助推中国经济，也催生了中国的独角兽企业，背后自然离不开政府对创新的鼎力支持。但对金融科技独角兽来说，这个时代充满机遇也不乏诸多挑战，网络安全与数据合规就被摆到了前所未有的重要位置。

金杜是中国最早专注于到网络安全与数据合规的业务律师事务所之一，也是目前国内最大网络安全和数据合规专业团队。金杜律师事务所高级合伙人宁宣凤律师谈到，“筚路蓝缕，以启山林！当数据成为其核心资产，关键就是要实现数据资产变现。我们作为专业律师，有一种天然而生的使命感，协助客户实现数据资产的价值，让合规工作创造价值”。

针对金融科技独角兽企业，宁宣凤律师特别提到，“如果前端数据获取存在瑕疵，资产就有瑕疵，商业模式未来就会面临崩塌。对于这些企业来说，一要颠覆对未来发展的认知，认识到自身与传统企业的区别，不能边做边合规；二要预见到数据商业化的弹性将是他们未来发展道路有多宽的一个重要评判标准”。

“我们现在也常常介入到企业的上市谈判中，这就是合规阐发出来的扩张性工作。” 元达律师事务所合伙人刘晨光提及。

“总的来说，金融科技独角兽企业的法律需求集中在四个方面：企业合规、资本市场和上市、并购和知识产权。其中，监管是重中之重，因为金融行业历来受到严格监管。”高伟绅律师事务所合伙人方刘指出。

 “分得再细一些，他们的法律需求还涉及数据跨境传输、数据安全与信息治理、数据泄露危机管理等。一旦重大危机事件发生，便是生死问题。” 刘晨光律师补充道。

未来已来

金融科技独角兽企业一般涉及多个应用场景：互联网金融、征信、消费贷款、投融资等等。每个场景下，每个产品收集上来的个人数据可能形成“数据孤岛”。倘若企业贸然打通，形成比较完整的数据画像来做数据营销或者信用报告是不合规的，因为未经用户授权。

但从未来来看，金融科技企业需要将这些数据变成打通的资产为其所用。律师的角色正在于帮助企业前期设计好这个模式，从而在产品层面形成一个合理性、在用户层面形成一个必要性，确保企业数据资产商业化保有足够弹性。

在宁宣凤律师看来，金融科技代表整个经济的未来，整个行业能走多远取决于数据资产的合规性、变现渠道和方式，“未来已来，毫无疑问的是，数据是未来经济的核心和灵魂。我们需要看到数据变现的未来，帮助企业调整好商业模式，同时基于获得经授权的数据，帮助企业判断授权范围、并在授权与产品之间建立必要性联系。”

据宁宣凤律师介绍，目前国内能够帮助客户调整商业模式、实现数据合规的律所很少，多数律所缺乏对数据经济前瞻性的判断。金杜是国内顶尖的具有全球化视野，能够为客户提供多维度、体系化、符合未来经济发展趋势和立法趋势的数据合规法律服务的律所。

数据未来商业化很重要的一点还在于：发现新的市场。对于金融科技企业来说，技术是工具、金融是形式、资产是数据——当所有大体量数据结合形成新的势能后，未来将是“数据定义一切”或者说“新的市场需求将源于数据指向”，宁宣凤律师指出。

“金融科技企业利润率高、发展速度快、影响力全面，新兴的商业模式与产品都依赖于ABC技术（A代表人工智能、B代表大数据、C代表云计算），这些技术的核心是数据。”刘晨光律师指出。

 “当下，金融科技市场发展太快，以致于监管机构不得不在鼓励发展与管控风险中间找取平衡，最终起到支持实体经济的作用。我国P2P行业在经历‘暴雷’及暴露出巨大风险后，银监会的监管更趋严格，但真正从市场出局的仅是那些不合规企业。总体来看，金融科技整个行业的发展空间在中国是非常被看好的，尽管短期来看，中国的监管机构似乎在选择性地颁发金融科技业务的相关许可证，例如互联网银行牌照，类似的在香港是虚拟银行牌照。” 方刘律师指出。

另据香港金管局数据，截至8月31日已收到29家机构递交虚拟银行牌照申请，其中包括腾讯、蚂蚁金服、京东金融、小米金融、中国平安等。香港近年来加快金融科技发展步伐，鼓励设立虚拟银行，引进内地金融科技力量。据方刘律师介绍，高伟绅是为数不多的、可为金融科技企业在香港申请虚拟牌照提供法律服务的律所之一。

香港此举会否削弱中国内地对金融科技独角兽的吸引力？

对于这个问题，宁宣凤律师认为“市场对企业的吸引力才是最根本、最重要也是最突出的，金融科技行业更是如此，用户永远是兵家必争之地。香港此举只会催化内地金融科技企业的发展，因为大部分金融科技企业的发展都不再仅局限于‘一城一池’：技术开发、设立基金、上市融资等业务可能分散在世界各地，但最终产品一定会落地中国，因为中国有最大的用户市场。所以中国周边国家和地区提供的这种融资环境和渠道反而会促进扎根中国内地的金融科技企业的快速成长。”

总体看，中国金融科技独角兽在数量上虽然略逊于美国，但估值上却是美国的3倍，中国正成为金融科技独角兽大国，但无论从金融行业的成熟度、衍生品的多样性、市场的灵活度和稳定度、还是金融科技技术层面本身，中美仍存在不小差距。

“中国有比美国金融科技企业发展更好的土壤，一方面国家层面大力支持人工智能、区块链等新技术发展，另一方面大数据和数字化基础设施又反哺这些新技术在中国更好更快地发展，这也使新型共享企业在中国的落地速度很快，从而助力这些企业更有底气去做全球布局。”宁宣凤律师告诉ALB。

 “现阶段，中国金融科技企业的发展重点仍放在国内市场，随着未来几年业务逐步渗透至欧洲，中国企业也必将在更广及更大程度上受制于GDPR规制。”方刘律师指出。

是难点，也是入口

金融科技企业目前至少占到金杜律师事务所整个网络安全与数据合规业务的20%-30%，2018年数量超过25个。“越来越多的金融科技企业已意识到网络安全与数据合规是他们无法躲避的一条路，这既是数据合规律师工作的难点，也是一个入口——一方面我们帮助企业做好现在的合规，另一方面也对其之前的存量瑕疵数据做‘亡羊补牢’，”宁宣凤律师告诉ALB。

受访的三位合伙人亦均表示，金融科技行业发展太快、中国在这方面的监管和立法又尚未完善，这为法律工作者在为这些以数据为生产力、以数据安全为生命线的企业提供服务时，提出了不小挑战。

作为数据合规的领先律所，金杜通过为企业做“合规体检”来协助客户快速、有效的实现数据合规。相比于传统的“体检”方式，金杜创造性地借助技术的力量来帮助企业“查缺补漏”，达到商业利益和法律合规的完美平衡。金杜孵化的法律科技公司理脉，是中国法律研究与分析及数据可视化领域的先锋，早已在业界名声鹊起。理脉通过智能评估方式对企业进行初步评分和风险提示，能更好使企业从宏观和客观角度了解自身合规整体状况以及存在的重大隐患。此外金杜还与多家技术服务提供商展开合作，为客户提供技术上可行，商业上合理及合规上可控的解决方案。

作为数字证据分析方面的领先律师事务所，元达是中国首批专注于运用数字信息工具解决法律问题的。元达目前在数据方面的法律服务布局已经完成，通过与McDermott Will & Emery建立战略联盟提供DDD（数据合规尽调）、招聘技术顾问、与BAT类的公司合作或签约战略合作，共享技术、产品、标准、模板等等。

“服务金融科技企业的难点在于要提供‘合规+商业+技术’并能落地的整体解决方案。”刘晨光律师指出。

 “中国企业过去很多年合规工作相对滞后，但现在欣喜看到：以金融科技企业为代表的新兴企业在数据合规方面已经走向全球市场，他们产生了批量化的、稳定的数据合规法律需求。在法律适用层面的变化是：以往再复杂的诉讼，至多同时涉及几个法域，但数据合规很不一样：一定要由全球视野、全球经验、全球资源的律所来提供服务。在这样一个全球背景下，被摆到一个前所未有的重要程度。”刘晨光律师指出。

数据全球化流通是不可阻挡的趋势，很多司法辖区关于网络安全与数据合规的法律本身是有冲突的。作为数据合规律师来说，不能仅仅提供局限于单个司法辖区的服务，应结合多个司法辖区的网络安全数据合规要求，从全球高度给企业设计数据全球跨境流通的顶层设计。

“金杜在这方面提供的是全球一体化服务，我们从商业、模式、法律等多维度去帮助企业避免现有法律冲突对其实际数据流通与商业模式造成巨大影响，也减少因每个人看问题不同的角度与高度带来的沟通成本问题。”宁宣凤律师介绍说。

 “我们帮助企业进行风险评级，不固步自封也不铤而走险，就像在高空走钢丝绳，存在一定风险，但这些风险均经过了前期审慎权衡与测算。正是由于目前中国金融科技行业的立法处于‘发展中’状态，给律师提供了机会参与和见证相关立法从无到有、不断完善的发展进程，这使我们能从宏观视角更好地服务金融科技企业。”方刘律师谈到。

“高伟绅在为金融科技独角兽提供法律服务方面具备独特优势，借助我们服务传统金融机构的悠久传统和丰厚经验，以及我们在中国大陆的广泛执业能力，我们可为金融科技独角兽企业提供一站式服务，覆盖他们的全部法律的需求。” 方刘律师告诉ALB。