A customer uses Yu'ebao, an Alipay's online money-market fund, on his smartphone. [Photo provided to China Daily]

One of the biggest changes to the domestic financial industry during the 12th Five-Year Plan (2011-15) has been the boom in online financial services. With the smooth development of Internet-based technologies, e-payments and e-transfers have fundamentally changed the way people use money. For instance, it is increasingly common for people to purchase a product online using their cellphones and then await its express delivery.

In order to compete with the Internet companies that provide convenient digital services and products, banks have had to constantly expand their own online services. Besides e-payments and e-transfers, people can now order online travel checks, buy insurance online, and purchase stocks and bonds via the Internet.

But while they add convenience to daily life, these measures also bring new risks. It is not difficult to hide one's true identity in the virtual world and many evildoers find the growth in online financial services convenient too, for the wrong reasons. They use the Internet to commit frauds, hack banking information, or even steal money directly from private and public accounts. Because of this, security should be a primary concern for providers of online financial products and services. For the State, there is additional risk because all the key technologies such as the processor chips, operating systems, and databases are controlled by foreign countries.

The security of online financing is concerned with the economic security of the State as well as the integrity of individuals, companies and other entities. In the 13th Five-Year Plan (2016-20) period, it is predictable that the Internet will bring more fundamental changes to China's financial market structure, which will further highlight the significance of online-financing services' security.

It is more than necessary to promote China's ability to defend financial security during the 13th Five-Year Plan (2016-20) period. For that, several preparatory jobs need to be done from now on.

For a start, China's financial legislation lags behind and lacks detailed regulations covering the providers and users of online financial products and services.

Second, more attention needs to be paid to online financial security. The State might need professional organizations to coordinate efforts, like sharing risk information, to solve the problem. Banks need to train their staff members in key positions, so that they are aware of the importance of security. And purchasers of online financial products and services need to be aware of security as users.

Third, online financial security is part of the cybersecurity, so it is urgent to strengthen the latter as a whole to better protect the former. Institutions and universities ought to strengthen research on key technologies such as firewalls and encryption, so as to fill in the current flaws in security. More importantly, technologies like identifying visitors and tracking them back to the source must be developed so that evildoers will no longer be able to hide themselves in the virtual world.

Fourth, domestic technology needs to be developed. Currently over 70 percent of the routers of domestic financial institutions are Cisco products, while over 80 percent of their servers are made by IBM; if that's not enough, more than 70 percent of China's four major State-owned banks and commercial banks use overseas products in their data centers. All these pose serious challenges to China's online financial security and we need to both set standards for imported products to ensure their security and encourage domestic enterprises to produce competitive products.

Finally, but no less important, online financial security is a global issue, too, which requires international coordination. It is advisable for China to negotiate with other responsible powers to establish an effective mechanism so they can share information on financial threats in cyberspace and join hands to fight those threats. Only with the efforts of all can China effectively ensure its own online financial security.

The author is a senior researcher on cybersecurity at CCID Think Tank, which is affiliated to the Ministry of Industry and Information Technology.