In the wake of a new technological revolution and rapid industrial transformation, the integration of technological advancements, industrial upgrades, financial innovations, and data security is increasingly seen as pivotal for driving economic growth, especially in China. The marriage of these elements is viewed as the only path towards achieving high-quality economic development, a hallmark of China’s emergence in the new era. Among the various drivers of this paradigm shift, industrial digital finance has emerged as a crucial engine of economic growth.

Industrial digital finance refers to a model in which financial institutions leverage internet-based information technologies in tandem with traditional banking practices to deliver comprehensive financial services tailored to market players within various industry sectors. As China’s digital economy expands, so too does the concept of industrial digital finance. This new financial model thrives on the smooth flow of digital information pertaining to goods, services, and capital within the industrial ecosystem. By utilizing modern digital technologies, industrial digital finance aims to facilitate both the digitization of industries and the emergence of new digital markets.

The evolution of industrial digital finance can best be understood through a historical lens, tracing its development across three distinct stages. The initial phase, termed traditional industrial finance 1.0, was characterized by basic payment processing and credit services primarily tailored to individual enterprises. This rudimentary model heavily relied on market-based credit assessments and provided insufficiency to smaller firms lacking robust credit guarantees.

As the need for refined financial models grew, the concept of supply chain finance 2.0 emerged. It expanded financial services to cover participants across various stages of the supply chain, facilitating diverse service offerings and increasing efficiency. This model mirrored improvements in service quality, yet still struggled to meet the complex demands of the evolving marketplace.

Presently, we find ourselves in the era of digital finance 3.0, marked by the deployment of advanced digital technologies throughout financial institutions. This phase breaks down barriers and bottlenecks, establishing a multifaceted financial service model that encompasses entire industry chains. Importantly, it enhances operational efficiency exponentially while also paving the way for increasingly personalized services. Digital finance 3.0 is not merely an upgrade of digital platform tools; it is a revolutionary leap in the very fabric of our financial systems. Here, financial services are deeply entwined with the operational management of real-world enterprises, helping to minimize operational costs and risks while simultaneously addressing a broad spectrum of both financial and non-financial needs.

As industrial digital finance continues to evolve, we observe distinct trends shaping its trajectory. Initially rooted in consumer finance targeted at billions of individuals, the digital finance ecosystem started to grow as players adapted their strategies and technologies to the broader realm of industrial finance, a sector replete with potential. Consumer finance was particularly straightforward due to its vast, homogeneous customer base, and the standards for service prerequisites were relatively low. This made it a logical entry point for financial institutions venturing into digital finance.

Yet, it is important to note that the relationship between consumer digital finance and industrial digital finance is not dichotomous but rather symbiotic. The growth of e-commerce and offline transactions interlinks consumers with supply entities, manifesting a deep synergy where aspects of industrial finance pervade consumer finance and vice versa. While consumer digital finance is viewed as the foundational step within the larger digital finance landscape, industrial digital finance stands as the advanced stage, showcasing the innovative capabilities of financial institutions and their operational prowess.

In contrast to earlier consumer digital finance initiatives led by e-commerce giants, the present industrial digital finance sector is dominated by traditional financial institutions such as commercial banks. This shift is due to their advantages in customer resource accumulation, industry expertise, credit assessment, and expansive funding capabilities. While consumer digital finance encounters obstacles in customer acquisition and retention, the process remains simpler due to its standardized nature. On the flip side, industrial digital finance faces more complexity owing to the unique financing needs of small and medium enterprises (SMEs). For these institutions, securing financing is often challenging, as the operational intricacies demand a more specialized approach to customer engagement and service provision.

For financial institutions, particularly banks, industrial digital finance is no longer merely a supplemental service; it has evolved into a cornerstone of stability for comprehensive asset management. According to statistics from the Central Bank, in 2024, loans to enterprises and institutions exceeded 60% of total bank lending—a ratio significantly higher than that of individual loans or overall loan growth rates. This trend underscores a pivotal shift toward industrial digital finance as a strategic direction for financial institutions. Smaller banks, which previously found themselves overshadowed in the consumer segment by larger banks and tech giants, can cultivate niche positions by capitalizing on their regional advantages and tailoring unique financial services to local industries.

To cultivate a healthier framework for the growth of industrial digital finance, several policy recommendations emerge. First and foremost, it is essential to encourage financial institutions to align their services more closely with the operations of the real economy. Institutions should recognize the evolving landscape shaped by digital advances and proactively adapt to these changes, aiming to seize new opportunities daunting as they may appear. This collaborative effort must involve various stakeholders, including businesses, technology firms, and government organizations, to establish a cohesive vendor ecosystem that supports this fusion of industry and finance.

Moreover, enhancing the technological infrastructure underpinning industrial digital finance is crucial. Regulatory bodies must facilitate increased investments in digital infrastructure to promote greater accessibility to financial services. This encompasses the establishment of a robust market system grounded on data element circulation, as well as fostering sectors within financial institutions that prioritize research into cutting-edge technologies such as blockchain and artificial intelligence.

As regulatory frameworks evolve, it is imperative to innovate supervisory models that ensure conducive environments for the flourishing of industrial digital finance. Financial regulators need to develop norms that clarify compliance in the face of innovative undertakings, addressing emerging challenges while fostering healthy developmental trajectories.

Lastly, optimizing the environmental context within which industrial digital finance operates is critical. Government agencies should amplify their outreach and role in promoting industrial digital finance products as pivotal to supporting small and medium enterprises. Furthermore, a streamlined dialogue should be established among government sectors, financial entities, and the business community to ensure collaborative development, ultimately resulting in a more resilient industrial digital finance ecosystem.