2 April 2018
FinTech innovations can complement financial inclusion by broadening financial access “at scale” and improving the quality of financial services through “efficiency”, concluded 130 policymakers and regulators from 50 countries and over 45 institutions who are attending the FinTech Policy Forum, jointly organized by the Central Bank of Jordan (CBJ) and the Alliance for Financial Inclusion (AFI) on 2 April 2018 in Amman, Jordan...
Prof. Douglas Arner — leading authority on the issue of FinTech laws and regulations — started the proceedings on a reassuring note saying that “the idea of technology transforming finance is not new, not unfamiliar, and as a result, nothing to be afraid of.” Technologies such as the telegraph, ATM and computer have contributed to the transformation of finance. Smartphones are amplifying this transformation through rapid penetration across the globe with a potential to provide financial services “at scale.”
However, scale can create “risk blind spots” for regulators. FinTech companies can move from “too small to care” and “too large to ignore” to “too big to fail.” Prof. Arner suggested to build and facilitate a 21st century infrastructure for supporting market functions; develop appropriate regulatory responses and apply graduated regulatory requirements to firms based on their level of risk; and use regulatory sandboxes and other test-and-learn approaches as an opportunity to test new approaches.
With the emergence of FinTech as a key catalyst for financial inclusion, the Forum aims to highlight the need for a paradigm shift in regulatory and policy approaches, as well as share practical solutions that can bring financial services to the most vulnerable segments of society. There are 1.1 billion people who lack legal identity and women globally who cannot access financial services. As a result, they are restricted in obtaining formal financial services, while there are 65.6 million forcibly displaced people globally, one of the highest levels of displacement the world has witnessed. At the same time, there are 200 to 245 million MSMEs in developing countries with restricted or no access to finance — an estimated credit gap of $2.1 to $2.6 trillion. ...
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