APAC regulators accelerate fintech regulatory efforts – CCAF report

Monday 25 April 2022 09:07 CET | News

The Cambridge Centre for Alternative Finance (CCAF) has released a study revealing to the opportunities and challenges associated with fintech and digital financial services.

The Fintech Regulation in Asia Pacific (APAC) study draws on data from two surveys issued to a select number of regulators and encompasses a qualitative review of regulatory frameworks relating to fintech activities in 20 sampled jurisdictions across APAC.

According to the report, the COVID-19 pandemic has accelerated the adoption of fintech in APAC. In response, financial regulators have increased the regulatory priority of the sector, and launched a number of measures, focusing primarily on ensuring economic relief (50%), cybersecurity (50%), customer onboarding and due diligence (44%), and business continuity (44%).

As of early 2022, 25 jurisdictions had at least one operational regulatory sandbox (with only 13 on 2019). 11% of respondents indicated having introduced a regulatory sandbox during the pandemic, while 37% said they had accelerated their sandbox initiative during the period, indicating that COVID-19 has played a catalytic role in the establishment of regulatory sandboxes.

Considering the existing fintech-specific regulations in place, the findings indicate that the digital payments, e-money and remittances sectors have the widest coverage in APAC, with more than 80% of sampled jurisdictions in the region having frameworks in place for each sector. Equity crowdfunding and peer-to-peer (P2P) lending are other widely covered sectors, with 78% and 50% of sampled jurisdictions in APAC, respectively, having frameworks in place.

Open Banking is another emerging trend that regulators across the region are increasingly looking into. Australia, Singapore, Hong Kong, India and Japan are amongst the seven countries in APAC with an open banking framework in place. China, Indonesia, Malaysia, the Philippines, and Thailand are amongst the seven jurisdictions looking to introduce one.

Looking at cross-sector verticals, the study found that regulatory frameworks in the anti-money laundering (AML) and data protection verticals are the most prevalent, with nearly complete coverage across the sample. In contrast, electronic know-your-customer (eKYC) has the greatest instances of missing regulatory frameworks, with only 12 jurisdictions having this in place.

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Keywords: report, fintech, digitalisation, COVID-19
Categories: Banking & Fintech
Companies: Cambridge Centre for Alternative Finance
Countries: Asia, Oceania, Pacific
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Banking & Fintech

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