Financial Regulation of Fintech

Abstract

Effective financial regulation is clearly crucial to innovation and the future success of the financial services industry and, in specific, FinTech. There are also unprecedented opportunities for reforming regulation and also creating new businesses in the process. Examples include: using “big data” regulatory online reporting and analytics to streamline reporting; and stimulating a new generation of “RegTech” companies to provide the regulatory/compliance software. This paper reviews the current regulatory pressures faced by the financial services industry, and discusses new “big data” approaches to regulating financial companies. Three actions are highlighted: a) an open-source platform for FinTech regulation, b) a regulatory XML to help standardize reporting and c) an overarching international standards body. Lastly, we examine responses by the U.K. Financial Conduct Authority (FCA), such as Project Innovate.