From Industry Sandbox to Supervisory Control Box: Rethinking the Role of Regulators in the Era of FinTech

50 Pages Posted: 6 Nov 2019 Last revised: 13 May 2021

See all articles by Cheng-Yun Tsang

Cheng-Yun Tsang

College of Law, National Chengchi University

Date Written: July 10, 2019

Abstract

Rapid developments of financial technology (fintech) and the unbundling of financial services have given rise to greater collaboration between financial institutions and fintech innovators. Such collaboration takes four major forms: Third-party service relationships, data-sharing arrangements, regulatory experiments, and industry consortia. Each type of collaboration presents certain risks or governance issues to the consumers, the participating firms, and the financial market as a whole, and hold different ramifications for the existing regulatory regime. This paper argues that a novel regulatory approach is needed to help the regulators continuously identify, evaluate, and address the issues as these fintech-era collaborations deepen. This paper proposes that with the proper use of supervisory technology (SupTech), regulators can turn current initiatives such as industry sandboxes into the supervisory control boxes to effectively regulate fintech-era collaborations and shift current practices into a new paradigm of technology-enabled regulation.

Keywords: FinTech, SupTech, RegTech, Fintech Collaboration, Regulatory Sandbox, Industry Sandbox, Open Banking, Blockchain, DLT, Fintech Regulation, outsourcing regulation

Suggested Citation

Tsang, Cheng-Yun, From Industry Sandbox to Supervisory Control Box: Rethinking the Role of Regulators in the Era of FinTech (July 10, 2019). Journal of Law, Technology and Policy, 355-404 (Fall 2019), Available at SSRN: https://ssrn.com/abstract=3420539

Cheng-Yun Tsang (Contact Author)

College of Law, National Chengchi University ( email )

Taipei, 116
Taiwan

HOME PAGE: http://https://cytsangsite.wordpress.com/

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