Best Practices for Effective Development of Fintech
The rapid evolution and development of Fintech is dramatically changing the face of the financial services industry, and offers the potential for increased productivity and efficiencies in the way financial services are delivered. It has also challenged policymakers worldwide as they develop regulatory responses that strike a balance between promoting innovation, maintaining the resiliency of the financial system and ensuring consumers are protected. Further, the explosive emergence of 'big data' and artificial intelligence has amplified concerns around data privacy and cybersecurity.
With these issues in mind, ASIFMA has formulated a set of ten best practices to guide regulators in the Asia region as they seek to support the development of Fintech to better serve consumers, businesses and investors.
Best Practice 1: Support the development and adoption of responsible, safe and secure Fintech products and services, by facilitating dialogue between Fintech participants, financial institutions and policymakers.
Best Practice 2: Work with the industry to explore Regtech solutions to create more efficient and effective regulatory supervision and reporting mechanisms.
Best Practice 3: If required, develop regulatory policies that strike an appropriate balance between innovation, safety, and consumer protection.
Best Practice 4: Ensure consistent regulatory standards are applied to all market participants.
Best Practice 5: Ensure inter-agency cooperation to promote consistency nationally across different sectors impacted by Fintech such as banking, securities, insurance and telecommunications.
Best Practice 6: Enhance cross-border cooperation with other regulators to promote use of best practices, recognition agreements and harmonisation of laws and regulatory requirements.
Best Practice 7: Support industry-driven interoperability.
Best Practice 8: Provide a clear framework and guidelines to allow for cross-border transmission of data for processing and storage.
Best Practice 9: Ensure laws support technological developments.
Best Practice 10: Promote cybersecurity and data security in a globally interconnected financial system.