Cover FinTech Notes
Institutional Arrangements for Fintech Regulation: Supervisory Monitoring
Author: Parma Bains and Caroline Wu
Series:
Fintech Notes
Volume/Issue:
Volume 2023: Issue 004
Language:
English
Publication Date:
26 Jun 2023
DOI:
https://doi.org/10.5089/9798400245664.063
ISBN:
9798400245664
ISSN:
2664-5912
Pages:
58
Keywords:
Fintech; sandbox; innovation; regulation; innovationhub; supervision; techsprint; IMF Library; policy sandbox; technology sprint; sector sandbox; publication order; UK Financial Conduct Authority; cross-border sandbox; Emerging technologies; Technological innovation; Global
Legal-disclaimer:
Fintech Notes offer practical advice from IMF staff members to policymakers on important issues. The views expressed in Fintech Notes are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The impact of fintech is growing rapidly worldwide, although this growth is uneven across jurisdictions. Depending on the effect of fintech, authorities may adopt a passive approach of monitoring fintech, try and capture new business models in existing regulatory frameworks, develop bespoke regulation, or adopt test and learn policies through institutional arrangements like innovation hubs and sandboxes. The test and learn approach is relatively unique to fintech in financial regulation and supervision and has advantages and disadvantages. While it can help authorities monitor and respond to the challenges of fintech in some scenarios, in others it could lead to risks to consumers and markets, particularly when designed poorly or with an unclear use case. Ultimately, the aim for authorities should be to consider fintech regulation part of the mainstream, where fintech expertise is embedded throughout an organization and not siloed to specific fintech units.
Cover FinTech Notes
FinTech Notes
ISSN:
2664-5912
Publisher:
International Monetary Fund