Chapter 9: Regulation of the Fintech Industry

This chapter is dedicated to the intricate relationship of financial technology (fintech) and its regulators: serving as these were once tasked with maintaining stability and protection from consumers but today are increasingly held accountable for driving innovation. Before we go anywhere, however, this chapter takes a deep dive into where our fintech journey has brought us. How fast we got to this point goes even further to illustrate just what a huge regulatory concern this is. Every space has already been the domain of digital technology disruption, and traditional finance stands colliding with it in the form of fintech; thus, regulators need a new set-up urgently which may work for today's fast-evolving world order. Strike a balance between stimulation and consumer safety – address the privacy concerns associated with data while simultaneously ensuring financial inclusion across the population at large. The concept of a ‘sandbox’ – allowing firms to experiment with new products in supervised settings – emerged as a vital instrument for comprehending and addressing certain risks. There is a chapter on the importance of self-regulatory organisations, another on the role of cross-border cooperation in regulation and, lastly, one that urges continuous learning and adaptation. The matter is further developed with real-world case studies, which illustrate rather well what went wrong and right in the history of regulatory enforcement. The fintech industry must be regulated, and this should be an ongoing practice.