China's financial regulators want to step up exchanges with international counterparts and strengthen cooperation on anti-trust issues, data treatment and consumer protection, Pan Gongsheng, deputy governor of China's central bank, wrote in a Financial Times opinion piece published on Wednesday.

"We will ensure that fintech regulation is effective, measured and guards against cross-border regulatory arbitrage and contagion," wrote Pan.

He praised fintech for its role in improving efficiency, lowering transaction costs and increasing inclusivity. However, he said risks employed by the sector may spread more widely due to its cross-border, cross-industry and cross-regional nature.

"Fintechs may also engage in excessive data collection and infringe customer privacy," Pan added.

He said China had "put in place a prudent yet inclusive regulatory environment for fintech development" in the sector's early days, but regulatory gaps still needed to be addressed and financial risks mitigated.

China implemented rules on financial holding companies last November to close regulatory loopholes. Rules require companies to have at least 5 billion yuan ($731.74 million) in capital to be licensed as financial holding firms, and they have to apply for approval from the central bank before establishment.

Authorities have rolled out a slew of other financial regulations, including more stringent antitrust requirements on non-bank payment firms, and tighter data collection rules for personal credit scoring business.

"When we insist on good supervision, equal access and fair competition, fintech will develop in a way that balances capital expansion, innovation and public interests, and develops technology for good," wrote Pan.

China's top banking and insurance regulator also said on Wednesday it would step up supervision of banks and insurers with internet platforms in 2021.

Earlier this month, it banned commercial banks from using third-party internet platforms to sell deposit products, including those relating to fixed-term deposits as to avoid spillover financial risks brought by the rapid development of the financial technology sector.

(With input from Reuters)