Smart Regulatory and Market Approaches to Fintech Innovation: - - PowerPoint PPT Presentation

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smart regulatory and market approaches to fintech
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Smart Regulatory and Market Approaches to Fintech Innovation: - - PowerPoint PPT Presentation

Nov 18, 2022 438 likes •607 views

Smart Regulatory and Market Approaches to Fintech Innovation: Toolkit Professors Dirk Zetzsche, Douglas Arner & Ross Buckley Toolkit - Content Plus Executive Summary Annex I: Financial Stability & Policy Responses I. Introduction

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Professors Dirk Zetzsche, Douglas Arner & Ross Buckley

Smart Regulatory and Market Approaches to Fintech Innovation: Toolkit

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Toolkit - Content

Content Seite 2

  • I. Introduction
  • II. FinTech: Taxonomy & Framework
  • A. ABCD Technology Archetypes
  • B. Fintech Provider Types
  • C. Fintech Markets
  • III. Context and Policy Approaches of Smart Regulatory and Market Approaches to Fintech
  • A. Fundamental Trends in Fintech and Financial Regulation
  • B. Overarching Policy Objectives: The ISIP Framework
  • C. Fintech Disrupting the Financial Systems in the MENA Region
  • IV. Common Regulatory Challenges and Risks with Fintech
  • A. Inclusion
  • B. Financial Stability
  • C. Integrity
  • D. Client Protection
  • V. Laying the Foundations for Reform
  • A. Principles for Smart Regulatory and Market Approaches
  • B. Principles for Financial Systems Development Cooperation
  • VI. Recommendations for the Design and Implementation of Smart Regulatory and Market Approaches to Fintech Innovation
  • A. Preconditions
  • B. Smart Regulatory Approaches to Fintech Innovation
  • C. Market Approaches to Fintech Innovation

D Furthering Digital Finance by Other Means

  • VII. Conclusions

Plus Executive Summary Annex I: Financial Stability & Policy Responses Annex II: Insights from the MENA Region Annex III: Resources & Papers

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SLIDE 3
  • II. FinTech: Taxonomy & Framework
  • II. FT: taxonomy & Framework

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ABCD FinTech Archetypes 1. AI/ML 2. Big Data 3. Cloud 4. DLT/BC FinTech Provider Types 1. Start-ups 2. BigTech/TechFin 3. Financial Institutions 4. Authorities: RegTech/SupTech FinTech Markets 1. G2B 2. B2B 3. B2C 4. B2G

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  • III. Context and Policy Objectives of Smart Regulatory and Market Approaches to Fintech
  • III. Context & Policy Objective

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Fundamental Trends in Fintech and Financial Regulation

  • Type of Players in FS Changing
  • Traditionally Segregated Sectors Converging
  • Rate of Innovation & Amounts of Data Changing
  • Objectives for Regulators and their Tools Changing
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A Framework of Fintech Innovation and Financial Policy Objectives (UNSGSA/CGAP)

  • III. Context & Policy Objective

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  • III. Context and Policy Objectives of Smart Regulatory and Market Approaches to Fintech
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  • IV. Common Regulatory Challenges and Risks with Fintech
  • IV. Common Regulatory Challenges and Risks with FinTech

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Financial Inclusion

  • FT-Related Inclusion Issues
  • Inclusion-Related Policy Tools

Financial Stability Integrity

  • FT-Related Integrity Issues
  • Integrity-Related Policy Tools

Client Protection

  • FT-Related CP Issues
  • CP-Related Policy Tools
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  • V. Laying the Foundations for Reform
  • V. Laying the Foundations for Reform

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Principles for Smart Regulatory and Market Approaches

  • Activity-Based Regulation
  • Proportional Regulation
  • Global fundamentals
  • Towards Lower Entry Barriers
  • Technology-Neutral Regulation
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  • V. Laying the Foundations for Reform
  • V. Laying the Foundations for Reform

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Principles for Financial Systems Development Cooperation

  • Technical Assistance & Capacity Development: national

vs regional

  • Ecosystem Stakeholder Engagement and Consultation
  • Holistic, Active, Coordinated In-Country Policymaking
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  • VI. Recommendations for the Design and Implementation of

Smart Regulatory and Market Approaches to Fintech Innovation

  • VI. Recommendations for Smart Regulation

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  • A. Preconditions
  • 1. Diagnostic Studies
  • 2. Definition of Fintech
  • 3. Vision for Fintech
  • 4. Governance and Institutional Coordination

(a) Coordination Required Across Public, Private, and Civil Society Stakeholders (b) Responsibility for Leading Fintech Reform to be Assigned to One Institution (c) Coordination Required Within Authorities

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  • VI. Recommendations for the Design and Implementation of

Smart Regulatory and Market Approaches to Fintech Innovation

  • VI. Recommendations for Smart Regulation

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  • B. Smart Regulatory Approaches to Fintech Innovation

Abolition of unsuitable regulation Proportional regulation Innovation hubs Testing and piloting Regulatory sandboxes Restricted licencing Waivers and no-action letters Umbrella license Voluntary FinTech License Regional FinTech License

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  • VI. Recommendations for the Design and Implementation of

Smart Regulatory and Market Approaches to Fintech Innovation

  • VI. Recommendations for Smart Regulation

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  • C. Market Approaches to Fintech Innovation to Support Smart Regulation, e.g.
  • enhancing financial and tech literacy programmes
  • supporting cybersecurity research centres
  • supporting accelerators by a) tax incentives for R&D, b) government-provided office

space, and c) university excellence programmes in the STEM sector

  • attracting angel investors by a) tax incentives for R&D, and b) innovation fairs and events
  • supporting the development of tech / digital clusters (university – private – government)
  • supporting alternative career paths of tech entrepreneurs: start-up grants, awards, tax
  • promoting tech (cybersecurity) cooperation and standardization among intermediaries, so

as to enhance cybersecurity while reducing its costs

  • creating digital clusters (eg. around universities) to further regional tech expertise
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  • VI. Recommendations for the Design and Implementation of

Smart Regulatory and Market Approaches to Fintech Innovation

  • VI. Recommendations for Smart Regulation

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  • D. Furthering Digital Finance by Other Means, e.g.
  • Reporting Tools, Tech-Based Reporting
  • Data Privacy Rules
  • Allocating Responsibility
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  • VII. Conclusions & Executive Summary
  • VII. Conclusions & Executive Summary

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§ 1 - Fintech is re-shaping Finance at an unprecedented pace. This digital financial transformation brings about structural changes, with positive and negative effects, likely even more in the high-potential markets of the Middle East and North Africa. § 2 - Fintech calls for the design of adequate approaches to Fintech innovation. An ecosystem is required that allows innovation balanced with financial inclusion, financial stability, market integrity and consumer protection. § 3 - Activity-based, proportional, and technology-neutral regulation, regulatory approaches in sequenced stages help to further innovation. This could include inter alia identifying and modernizing unsuitable regulation, adding proportionality to regulation, operating an Innovation Hub with experts of the regulatory authority, testing and piloting regimes, a regulatory sandbox, restricted licences, a full licence is essential for innovative firms as size requires and permits. Over these stages, as regulatory rigour and costs increase so tend to Fintech firms’ maturity and ability to cope with risks and compliance, while maintaining a level playing field for licensed entities. § 4 - Market-oriented approaches need to supplement regulatory approaches to provide a suitable FT ecosystem.

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Contact

  • VII. Conclusions & Executive Summary

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Professor Dr Dirk A. Zetzsche Dirk.Zetzsche@uni.lu Professor Douglas W. Arner douglas.arner@hku.hk Professor Ross P. Buckley ross.buckley@unsw.edu.au

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Readings on FinTech

Regulatory Sandboxes www.ssrn.com/abstract=3018534 TechFin / Data-driven Finance www.ssrn.com/abstract=2959925 Distributed Ledgers / Blockchain www.ssrn.com/abstract=3018214 eID / KYC Utilities www.ssrn.com/abstract=3224115 Corporate Technologies (AI etc.) www.ssrn.com/abstract=3392321 ICO Gold Rush www.ssrn.com/abstract=3072298 Regulating Libra www.ssrn.com/abstract =3414401 Rise of Tech Risk www.ssrn.com/abstract=3478640 FT4FI Roadmap www.ssrn.com/abstract=3245287 Future of Data-Driven Finance www.ssrn.com/abstract=3359399 AI in Finance: Putting Humans …. www.ssrn.com/abstract=3531711 Financial Operating Systems www.ssrn.com/abstract=3532975