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Aki Corsoni-Husain
Aki Corsoni-Husain
  • Aki Corsoni-Husain

  • Partner
  • Cyprus
George Apostolou
George Apostolou
  • George Apostolou

  • Partner
  • Cyprus
Chiara Deceglie
Chiara Deceglie
  • Chiara Deceglie

  • Partner
  • Luxembourg
Massimiliano della Zonca
Massimiliano della Zonca
  • Massimiliano della Zonca

  • Senior Associate
  • Luxembourg
Philip Graham
Philip Graham
  • Philip Graham

  • Partner
  • British Virgin Islands
Ayana Hull
Ayana Hull
  • Ayana Hull

  • Counsel
  • British Virgin Islands
Katerina Katsiami
Katerina Katsiami
  • Katerina Katsiami

  • Associate
  • Cyprus
Andrew Knight
Andrew Knight
  • Andrew Knight

  • Partner
  • Luxembourg
Joshua Mangeot
Joshua Mangeot
  • Joshua Mangeot

  • Counsel
  • British Virgin Islands
Mirza Manraj
Mirza Manraj
  • Mirza Manraj

  • Counsel
  • Hong Kong
Elina Mantrali
Mirza Manraj
  • Elina Mantrali

  • Associate
  • Cyprus
Vanessa Molloy
Vanessa Molloy
  • Vanessa Molloy

  • Partner
  • Luxembourg
Andrea Moundi Savvides
Andrea Moundi Savvides
  • Andrea Moundi Savvides

  • Consultant
  • Cyprus
Marina Stavrou
Marina Stavrou
  • Marina Stavrou

  • Associate
  • Cyprus
Matt Taber
Matt Taber
  • Matt Taber

  • Partner
  • Cayman Islands
Carolynn Vivian
Carolynn Vivian
  • Carolynn Vivian

  • Counsel
  • Cayman Islands

Global Fintech Regulatory Rapid Assessment Study due to Covid-19

The World Bank and the Cambridge Centre for Alternative Finance (CCAF) have very recently jointly published the Global COVID-19 FinTech Regulatory Rapid Assessment Study recognizing the need to comprehend the impact of COVID-19 on the regulation of FinTech and regulatory innovation initiatives.

This global study seeks to assess how central banks and other financial regulators are responding to the challenges of Covid-19 in regulating and supervising FinTech activities and other forms of Digital Financial Services (DFS).

The joint World Bank and CCAF research team surveyed 118 central banks and other financial regulatory authorities from 114 jurisdictions. 66 per cent of surveyed regulators are from emerging market and developing economies.

The Government of British Virgin Islands (BVI) being an active player in the crypto-regulatory market has taken part in this survey supporting the FinTech related business within the jurisdiction.

The Covid-19 pandemic has severely impacted the global economy, including FinTech activities as well as their regulation and supervision. DFS are regarded as an integral part of a country’s Covid-19 response and critical infrastructure. DFS, including many forms of FinTech activities, are potentially critical for recovery efforts, to facilitate payments, savings, credit and insurance and to support the development of digital economies and e-government.

In outlining the results of the study, these reveal that:

  • Regulators observed a strong increase in the use or offering of many Fintech products and services since the outbreak of the pandemic, in particular digital payments and remittance.
  • Regulators in emerging markets and developing economies are more likely to have reported increases in the usage of digital payments and digital banks.
  • Respondents see rising risks in the FinTech market concerning cybersecurity, operational risks, consumer protection and fraud and scams.
  • The priority of FinTech for regulators has either increased or is remaining high in light of Covid-19.
  • Regulators recognise that FinTech can play a role in supporting regulatory objectives in light of Covid-19.
  • The majority of regulators have taken policy measures in light of Covid-19 but the majority of these measures were not specifically targeted at FinTech.
  • 37 per cent of surveyed regulators have taken at least one regulatory measure specifically targeting FinTech sectors’ activities.
  • 80 per cent of regulators felt that they have been resilient and adaptable in their response to the challenges of Covid-19.
  • Key internal challenges for regulators have emerged.
  • To support their work on FinTech in light of Covid-19, regulators considered they would benefit most from skills development and technical support.

The study on the impact of Covid-19 on regulatory innovation initiatives showed that;

  • The majority of respondent regulators have either accelerated existing regulatory innovation initiatives or introduced new initiatives.
  • No surveyed regulators reported the cancellation of an innovation initiative due to Covid-19.
  • Regulators in jurisdictions with high Covid-19 stringency measures are more likely to have accelerated their regulatory sandbox initiative.
  • Non-central bank financial regulators are more likely to have accelerated and introduced Reg Tech/Sup Tech initiatives in light of Covid-19.
  • The main challenges for planning and implementing regulatory innovation initiatives are around communication and coordination.

The study finds that regulators are responding to the challenges of Covid-19 and increasing digitalization of financial services by taking both sector-wide and, to a lesser extent, FinTech specific regulatory measures, as well as accelerating the pace of regulatory innovation initiatives.

Financial regulators have a critical role to play in the response to Covid-19 as they help to create the conditions and necessary interventions for sustainable development of FinTech markets and the expansion in the usage of DFS, while simultaneously monitoring and managing growing risks. These risks include stability of financial systems facing liquidity and portfolio performance issues, cyber threats which may increase during this major shift to online services, exclusion for consumers who lack the means to quickly move from cash or physical branch banking to DFS and a wide range of consumer protection risks and financial literacy challenges. An appropriate legal and regulatory framework for DFS and FinTech is therefore fundamental to the growth of the sector and its ability to advance financial inclusion

The Study can be found here.

A presentation of the study can be found here.