FOREIGN EXPERIENCE OF THE FINTECH SERVICES REGULATION

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FOREIGN EXPERIENCE OF THE FINTECH SERVICES REGULATION

Journal Title: Проблеми системного підходу в економіці - Year 2018, Vol 5, Issue 67

Abstract

The article examines scientific sources about the foreign experience of FinTech services. The features of the regulation and supervision system in foreign countries are described. Considering the potential vulnerability of FinTech to fraud and cybercrime services, supervisors use alternative methods of monitoring and risk control, including: the authority to inspect a third-party provider of FinTech services for the bank; regulatory requirements for contracts that provide the permission for supervision; ongoing monitoring of the FinTech services provider activities. Mostly regulators use two approaches for FinTech services regulation: based on rules and on principles. It was established that in their activity supervisory bodies rely on innovative technologies such as: artificial intelligence; distributed registers; unstructured data analysis. To ensure the right balance between ensuring financial stability and protecting consumer rights, regulators are turning to the development of such methodological approaches and innovative solutions as innovative hubs, Fintech accelerators, regulating “sandboxes”. Also, the comparative analysis of the use of the regulatory “sandbox” in foreign countries was carried out. The key elements of sandboxes are the purpose of creation, the right to contact the sandbox, the criteria for risks, guarantees and other restrictions, the time for application and testing, the costs for the regulator and participants of the “sandbox”, the actions of the regulator after the testing. The common and distinctive features of the “sandboxes” in the countries of the world were characterized. Moreover, the advantages and disadvantages of using this type of the Fintech services regulation were highlighted. The stages of the operating process for potential clients of “sandbox”, which include the stages of preliminary classification, application submission, application evaluation, experiment, ending participation in the “sandbox” were presented. A structural and advisory model for the creation of a national regulatory “sandbox” was developed.

Authors and Affiliations

A. Y. Semenog, S. V. Tsyrulyk

Keywords

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EP ID EP562326
DOI 10.32782/2520-2200/2018-5-31
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