Featured Product

    FSI Survey Examines Policy Responses to Fintech Developments

    January 30, 2020

    The Financial Stability Institute (FSI) of BIS published a paper that provides a cross-country overview of policy responses to fintech developments, based on the survey responses from about 30 jurisdictions. The paper identifies several challenges facing authorities such as keeping up with the speed of technological change to understand novel business models and develop adequate policy responses, collecting data on fintech developments, adjusting regulatory reporting requirements, cooperating and coordinating at the local and international levels, and continuing to prevent regulatory arbitrage.

    The paper also proposes a conceptual framework for analyzing policy responses to fintech, referred to as the "fintech tree." The fintech tree identifies three categories: fintech activities, enabling technologies, and policy enablers. Authorities pursue a range of approaches when regulating fintech activities. For digital banking, licensing regimes or other specific requirements are the exception. Some jurisdictions, however, have launched initiatives to facilitate the establishment of new banks, including digital banks. For enabling technologies, regulators have adjusted their existing regulations to add technology-specific elements in existing laws, regulation, or guidelines. However, there are no licensing regimes or other requirements that are specific to insurtech business models in surveyed jurisdictions. Nevertheless, the absence of insurtech-specific requirements does not mean that authorities are not responding to the increasing digitalization of the insurance business.

    The survey reveals that almost all participating jurisdictions have either modified their existing regulatory frameworks or clarified their regulatory expectations on the use of cloud computing by financial institutions. Only a few jurisdictions have issued regulations specific to the distributed ledger technology while, to date, there are no specific regulatory requirements for financial institutions’ use of machine learning and artificial intelligence. However, a few jurisdictions have issued non-binding principles to encourage ethical and responsible use of artificial intelligence by financial institutions. Additionally, given its critical role in the economy, almost all jurisdictions have put in place cyber-security regulations and guidance specific for the financial sector.

    Among the identified challenges, collecting data related to fintech developments and adjusting regulatory reporting requirements has been identified as a common challenge in most jurisdictions. Wherever licensed, authorities are obtaining information from regulated entities, including new entrants offering fintech services, through regulatory reporting. Other sources include information obtained through innovation facilitators or through the research of other public and private organisations. However, a survey conducted in 2019 by the Irving Fisher Committee found that fintech developments present various challenges to statisticians in a number of central banks. Some of these challenges are related to the granularity of data required to identify fintech firms and the integration of fintech activities in business classifications.

     

    Related Links

    Keywords: International, Banking, Insurance, Fintech, Regtech, Blockchain, Artificial Intelligence, Cyber Risk, Cloud Computing, Big Data, Insurtech, Reporting, BIS, FSI

    Related Articles
    News

    APRA Updates Validation and Derivation Rules in September 2020

    APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.

    September 24, 2020 WebPage Regulatory News
    News

    EC Proposes Frameworks for Crypto-Assets and Operational Resilience

    EC adopted a package that includes the digital finance and retail payments strategies and the legislative proposals for regulatory frameworks on crypto-assets and digital operational resilience.

    September 24, 2020 WebPage Regulatory News
    News

    ECB Publishes Opinion on Proposals to Amend Securitization Framework

    ECB published an opinion (CON/2020/22) on proposals for regulations amending the securitization framework of EU, in response to the COVID-19 pandemic.

    September 24, 2020 WebPage Regulatory News
    News

    FCA Consults on Regulation of International Firms in UK

    FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.

    September 23, 2020 WebPage Regulatory News
    News

    MAS Amends Notice on Capital Adequacy Requirements of Banks

    MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.

    September 23, 2020 WebPage Regulatory News
    News

    FCA to Begin to Move Firms to New Data Collection Platform RegData

    FCA announced that it will move firms to RegData from Gabriel in the coming months in stages, based on the reporting requirements of firms.

    September 23, 2020 WebPage Regulatory News
    News

    ISDA Expects IBOR Fallbacks to be Effective by End of January 2021

    ISDA issued a letter to regulators to flag that it now expects the supplement to the 2006 ISDA Definitions and the Interbank Offered Rate (IBOR) Fallbacks Protocol to be effective around mid- to late-January 2021.

    September 23, 2020 WebPage Regulatory News
    News

    APRA Reviews Repayment Deferral Plans, Identifies Best Practices

    APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.

    September 22, 2020 WebPage Regulatory News
    News

    ESAs Assess Risks to Financial Sector After COVID-19 Outbreak

    ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.

    September 22, 2020 WebPage Regulatory News
    News

    BoE Confirms Withdrawal of COVID Corporate Financing Facility

    BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.

    September 22, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5836