For the purposes of this note, fintech refers to advances in technology that have the potential to transform the provision of financial services, spurring the development of new business models, applications, processes, and products. [...] The key consumer risks and corresponding regulatory approaches discussed in this note include the following: • Factors, such as the novelty and opaqueness of fintech business models, responsibilities of fintech entities in the context of those business models, a lack of consumer familiarity with, and understanding of the new offerings can lead to heightened risks of fraud or misconduct by fintech. [...] For any regulator contemplating implementing the kinds of regulatory measures discussed in this note, it will be important to prioritize and take a risk-based approach, to tailor regulatory approaches to country context, and to balance the need for consumer protection with the resulting impact on industry and market development and innovation. [...] A country’s existing FCP rules may not extend to fintech products and thus may not protect consumers due to the nature of the products or, even where a fintech product is equivalent to a traditional offering, due to the nature of the providers or their business arrangements. [...] Platform operators are also under a general duty to exercise skill, care, and diligence and act in the customers’ best interests.76 In Australia, platform operators have to check the identity and eligibility of the issuer, whether managers are fit and proper, and the completeness and legibility of the offer document.77 Dubai and Malaysia have more stringent requirements.
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