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Collaborations vital for a borderless FinTech ecosystem

By Pavithra R

June 12, 2020

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Today, sending money to a friend or performing real-time payment for buying products is not hard to imagine. Its all thanks to the innovations happening in the financial sector. FinTech has emerged as a powerful disruptor that is rapidly reshaping the financial industry on a global scale. By redefining the way people pay, lend and invest FinTech’s could challenge the viability of the financial sector, as well as its regulations, policies, and norms.

The potential of FinTechs for sustainable development is increasingly recognised and appreciated. Many countries are coming forward to put joint efforts aiming for a better FinTech future.

Recently, The New York State Department of Financial Services (DFS) has signed a Memorandum of Understanding (MOU) with France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR) to ease entry for FinTech innovators into the New York and French markets, furthering New York and France as innovation hubs for FinTech.

“This is the first cooperation agreement on FinTech signed by the ACPR with an American Authority. It underscores the ties between the two Authorities and their strong commitment to innovation. I am sure this agreement will help connect two major fintech ecosystems and promote innovative financial services in both countries that should benefit consumers, corporates and the wider economy,” said Governor of the Banque de France and ACPR Chairman Villeroy de Galhau.

The collaboration is not just limited to these two jurisdictions. The member of the Canadian Securities Administrators (CSA) has signed a FinTech co-operation agreement with the Financial Supervisory Commission of Taiwan (FSC). The members are Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan.

The agreement provides a comprehensive framework for co-operation and referrals related to the innovation functions which were established through the CSA Regulatory Sandbox initiative and by the FSC FinTech Regulatory Sandbox. The agreement includes a referral mechanism for innovative businesses and expects to enhance and clearly define information-sharing between these jurisdictions.

“This co-operation agreement between Canada and Taiwan aims to promote financial innovation, enhance supervisory cooperation, and facilitate market access for FinTech businesses on both sides. Canada is a well-established financial innovation hub. Taiwan is equipped with abundant technological talents, strong innovation capabilities and mature financial industry. This bilateral agreement is designed to create a mechanism for financial technology cooperation between Canada and Taiwan,” said Dr Tien-Mu Huang, Chairperson of Taiwan’s Financial Supervisory Commission.

FinTech could potentially impact developing countries’ strategic priorities and help them leapfrog many
stages of development. Developing nations such as Kenya, Mongolia, Bangladesh, Colombia, Chile and Peru are also in pace with the innovations happening. Last year the Monetary Authority of Singapore (MAS) and the Central Bank of Kenya (CBK) collaborated on FinTech Cooperation Agreement in a bid to support digital infrastructure development in Kenya.

The role that the government and public can play in the betterment of FinTech is extensive. Recently Ghana launched Digital Financial Services Policy to deepen financial inclusion and accelerate the shift to digital payments. US regulator has asked for public feedback on amending digital banking rules.

Industry collaborations are crucial in tackling complex topics such as interoperability, financial inclusion, etc. The need for a multifaceted digital engagement platform that brings global FinTech ecosystems together to engage, explore and do business is more than ever. Furthermore, an enormous financial prize may be in store for countries that can successfully manage the opportunities and challenges arising from FinTech.

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