Yang Qingli, managing director of BOCOM, said that the rapid development of the sector stemmed from the regulatory differences between the traditional finance sector and that online, along with China's low interest rate marketization.

When the sector matures, Internet finance will supplement the traditional finance sector, and innovative commercial banks will stand out, Yang said.

"The Internet serves as a channel, and the nature of Internet finance is finance," he said. "The advantage of the channel is that at the beginning, it attracts clients, and risk pricing can be more important then, especially as China promotes the interest rate reforms."

Internet finance includes online third-party payment, peer-to-peer lending, crowdfunding and online wealth management.

Regulating Internet finance is mainly related to the online third-party payments and is looser in China than in Europe and the United States, the BOCOM report said.

The trading volume of online third-party payments totaled 6 trillion yuan ($960.6 billion) in 2013, while in 2008, it stood at only 260 billion yuan, according to iResearch, a China-based Internet consulting group.

The asset scale of Yu'ebao, an online financial product launched by Internet giant Alibaba that focuses on money market funds, totaled 500 billion yuan by Feb 1 of this year, up from 55.7 billion yuan on Sept 1, 2013, according to Wind Information Co Ltd.

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