Institutional Arrangements for Fintech Regulation and Supervision (IMF Fintech)

Summary

• The IMF note examines the institutional frameworks for fintech regulation and supervision across 10 selected jurisdictions.p.8
• In March 2018, HM Treasury launched the UK Fintech Sector Strategy, establishing regulatory initiatives such as a Cryptoassets Taskforce and Fintech Bridge.p.11
• The Monetary Authority of Singapore committed about US$170 million to directly fund fintech initiatives and development.p.13
• The Global Financial Innovation Network connects regulatory authorities across more than 50 jurisdictions to facilitate regulatory learning and trial cross-border technologies.p.15
• In France, the ACPR FIU and AMF FIC established the Joint Fintech Forum with industry representatives in 2016 under a three-year mandate.p.15
• Kenya's Capital Markets Authority launched a regulatory sandbox in March 2019 to assist with onboarding financial technology applications.p.17
• Kenya's CMA plans to double its dedicated core fintech group from three to six staff members upon approval of its Fintech Guiding Framework.p.17

Key insights

1. Ministries of finance consistently take a leading role in high-level policy coordination, formulation, and drafting legislation for fintech.p.8
2. Supervisory responsibilities for fintech typically mirror established sectoral frameworks, dividing tasks along banking, insurance, and capital market lines.p.11
3. Most supervisory authorities organize their fintech capabilities around a full-time core team connected to a broader internal network of subject experts.p.13
4. Authorities differ in their statutory mandates, balancing traditional prudential and conduct risks against goals for market innovation, financial inclusion, and competition.p.8
5. The application of financial regulation relies on a combination of entity-based and activity-based oversight to prevent regulatory gaps.p.13
6. Building essential fintech foundation infrastructure requires a cross-agency, whole-of-government approach to align regulatory frameworks and support interoperability.p.15
7. International standard-setting bodies and networks are actively integrating fintech and virtual assets into existing supervisory standards and recommendations.p.16
8. To effectively respond to fintech developments without compromising financial stability, supervisory authorities require clear mandates, institutional flexibility, and strong coordination.p.18