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From FinTech to TechFin: The Regulatory Challenges of Data-Driven Finance

41 Pages Posted: 29 Apr 2017 Last revised: 4 Sep 2017

Dirk A. Zetzsche

ADA Chair in Financial Law / Inclusive Finance, University of Luxembourg; Heinrich Heine University Duesseldorf - Faculty of Law - Center for Business & Corporate Law (CBC)

Ross P. Buckley

University of New South Wales (UNSW) - Faculty of Law

Douglas W. Arner

University of Hong Kong - Faculty of Law

Janos Nathan Barberis

The University of Hong Kong - Faculty of Law

Date Written: April 28, 2017

Abstract

Financial technology (‘FinTech’) is transforming finance and challenging its regulation at an unprecedented rate. Two major trends stand out in the current period of FinTech development. The first is the speed of change driven by the commoditization of technology, Big Data analytics, machine learning and artificial intelligence. The second is the increasing number and variety of new entrants into the financial sector, including pre-existing technology and e-commerce companies. This paper considers the impact of these new entrants with their typically large pre-existing non-financial services customer bases. These firms (loosely termed ‘TechFins’) may be characterised by their capacity to leverage the data gathered in their primary business into financial services. In other words, TechFins represent an Uber moment in finance. This shift from financial intermediary (FinTech) to data intermediary (TechFin) raises implications for incumbent financial services firms, FinTech startups and regulators. This seachange calls for analysis to underpin regulatory approaches with a view to balancing the competing interests of innovation, development, financial stability and consumer protection.

Keywords: Big Data, FinTech, TechFin, Financial Regulation, Supervision, Enforcement, Algorithms, RegTech, Protected Factors, SMEs, Lending, Payment Systems, Robot Advice, Crowdlending

JEL Classification: G23, G24, G28

Suggested Citation

Zetzsche, Dirk A. and Buckley, Ross P. and Arner, Douglas W. and Barberis, Janos Nathan, From FinTech to TechFin: The Regulatory Challenges of Data-Driven Finance (April 28, 2017). New York University Journal of Law and Business, Forthcoming; European Banking Institute Working Paper Series 2017 - No. 6; University of Hong Kong Faculty of Law Research Paper No. 2017/007; University of Luxembourg Law Working Paper No. 2017-001. Available at SSRN: https://ssrn.com/abstract=2959925

Dirk Zetzsche (Contact Author)

ADA Chair in Financial Law / Inclusive Finance, University of Luxembourg ( email )

Luxembourg, L-1511
Luxembourg

HOME PAGE: http://wwwen.uni.lu/recherche/fdef/research_unit_in_law/equipe/dirk_andreas_zetzsche

Heinrich Heine University Duesseldorf - Faculty of Law - Center for Business & Corporate Law (CBC) ( email )

Universitaetsstr. 1
D-40225 Düsseldorf
Germany
+49 211 81 15084 (Phone)
+49 211 81 11427 (Fax)

Ross Buckley

University of New South Wales (UNSW) - Faculty of Law ( email )

Sydney, New South Wales 2052
Australia

Douglas Arner

University of Hong Kong - Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

HOME PAGE: http://hub.hku.hk/rp/rp01237

Janos Barberis

The University of Hong Kong - Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

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