Risks to consumers include mis-selling of products and services, financial exclusion, data privacy, security risks, or abusive behavior.5 The intensity and manner in which these risks materialize and spread across the system can vary depending on a long list of factors, including the business model, the distribution channel, the legal status and regulation of the providers, and the nature and degr. [...] Typically, the response will depend on the maturity, degree of adoption and risks of the fintech ecosystem, the country’s legal framework, the existing regulatory and supervisory setting, and the prospective institutional capacity. [...] The three main questions that authorities will face are: (i) What activities and firms to regulate?; (ii) When to impose full regulation and how to accompany the firms earlier through monitoring and testing when risks are not high?; and (iii) How to regulate the identified activities and firms once it is needed? 3.1 What to Regulate? The nature and risks of the fintech activity will determine whet. [...] One alternative is to require a partnership between the entity outside of the perimeter and an entity within the perimeter to allow fintech activity.24 If the entity outside the regulator’s mandate creates a subsidiary dedicated to the activity that is licensed, the regulator can extend its jurisdiction over those subsidiaries through the licensing framework.25 Another option is a Memorandum of Un. [...] This may be related to the overall capacity and resource constraints that several of these countries face, the specific challenges posed by big tech firms (which offer a broader scope of services in EMDEs than in advanced economies), the often-underdeveloped state of fintech in the country, and lower competition levels in the financial service markets (FSB 2019a and 2019c).
- Pages
- 55
- Published in
- Canada
