Embracing new technology will help traditional financial services firms with innovative tools and support Chinese financial sector's opening up, the CEO of a top financial technology start up said in Boao, Hainan province.

Amid the global wave of technology disruption, Chinese fintech companies are seeking innovative business models to reach targeted clients and strengthen compliance, Yuan Chenglong, CEO of Up Finance, a Chinese fintech firm, told China Daily during the Boao Forum for Asia 2018.

As a delegate from the emerging fintech business, Yuan believed that the development of financial technology will support the new type of financing institutions in China, satisfy the tightening regulations and accelerate the financial sector's opening up.

"Embracing new technology is a way to facilitate market-oriented financial development," Yuan said.

With China determined to further open its financial services sector, as announced by President Xi Jinping at the Boao Forum for Asia Annual Conference 2018, and the global economy evolving to a digital, smart and personalised business model and lifestyle, financial services models need to upgrade, Yuan said.

It means the innovative companies need to evolve from a product and channel-oriented model to customer-centered ones, with technology as an important pillar, covering artificial intelligence, robot investment advisory and big data, he said.

Fast technology development also brings challenges to the existing regulatory framework, and "one of the key issues in the near future is how to strike a balance between encouraging innovation and controlling financial risks," Yuan said.

IT compatibility and differences in business models are top strategies for future development, he said.

Facing pressure from tightening regulation, fast technology innovation space, and fierce competition with traditional financial service institutions, fintech companies, especially the small-sized ones, need to focus on more specific market segments supported by sophisticated data analysis technology.

The annual Government Work Report delivered in March by the premier has promised to further open up China's financial service industry by both expanding market access and lifting foreign investment restriction.

According to a research note from PwC, by the end of 2017, total assets of China's financial services industry reached $44 trillion.

The long-lasting separation of supervision of China's financial services industry has led to risks in certain sub-sectors, such as asset and wealth management, especially for shadow banking.

Last year, the People's Bank of China, the country's central bank, improved the so-called macro prudential assessment framework, targeting a coordinated and collaborative approach to prevent systemic financial risks, including restriction on the shadow banking business of asset management institutions and cracking down on internet micro loans.

Fintech development also brings into consideration another emerging issue of regulatory technology or "regtech", which has to manage additional hurdles of increased IT and security approvals as it deals with sensitive areas such as risk or compliance, said Henri Arslanian, PwC's fintech and regtech lead for the Chinese mainland and Hong Kong.

"Regtech solutions can address the less risky, high-volume, and time-consuming roles which are cost-intensive for any financial institution," Arslanian said.