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

    EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0

    EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.

    April 08, 2021 WebPage Regulatory News
    News

    MAS Amends Notice on Related Party Transactions of Banks

    MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.

    April 08, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Euro Short-Term Rate

    ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.

    April 07, 2021 WebPage Regulatory News
    News

    EBA Consults on Standards Related to FRTB-SA

    EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).

    April 07, 2021 WebPage Regulatory News
    News

    PRA Proposes Rules Related to IRB Approach for Credit Risk

    PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.

    April 07, 2021 WebPage Regulatory News
    News

    BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK

    The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.

    April 06, 2021 WebPage Regulatory News
    News

    FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks

    FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.

    April 06, 2021 WebPage Regulatory News
    News

    OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks

    OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.

    April 06, 2021 WebPage Regulatory News
    News

    EU Amends CRR and Securitization Regulation in Response to Pandemic

    To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).

    April 06, 2021 WebPage Regulatory News
    News

    HM Treasury Announces G7 Agreement on Green Agenda Ahead of COP26

    HM Treasury announced that G7 Finance Ministers and Central Bank Governors met ahead of COP 26, the 2021 UN Climate Change Conference, and agreed on green agenda.

    April 06, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6821