FinTech – Page 6 – FinTech and Blockchain Law Watch

Indonesia’s financial services authority issues its first FinTech regulations

Jan 12 2017

Indonesia’s financial services authority (OJK) has issued its first regulations relating to FinTech. The regulations lay out minimum capital requirements, interest rate provision and education and consumer protection rules.

Every Indonesian FinTech P2P lending firm must now register and secure a business licence from the authority. A company must have Indonesian Rupiah 1 billion ($75,000) in capital to register, and a further Indonesian Rupiah 2.5 billion ($188,000) to apply for a business licence. These figures are approximately half those that had been proposed in previously issued draft regulations. Foreign ownership is limited to 85%.

No maximum interest rate has been set, which again contradicts previous drafts of the regulations which set a cap of seven times Bank Indonesia’s seven-day reverse purchase rate per annum.

Muliaman Hadad, chair of OJK, told the Jakarta Post that the regulation was only an initial step in the authorities’ efforts to regulate and supervise the business. “What’s important is they get onto our radar because we don’t want to regulate the prudential aspects hastily. We want to provide [business] transparency guidelines first,” Hadad said. The OJK also has implemented a regulatory sandbox for firms to test services for consumers.

Bank Indonesia set up a dedicated office and regulatory sandbox in November 2016 to help FinTech developers. It will also provide services to help developers to understand Indonesia’s regulatory policies on FinTech, gather and disseminate information on developments, and hold regular meetings with authorities and international bodies interested in the use of technology in finance, Bank Indonesia said.

For a full text (in Indonesian) of the regulations, please click here.

Retailer invests in FinTech

Jan 05 2017

By Jonathan Lawrence

UK department store company House of Fraser is to invest £35m in Tandem, an app-only challenger bank. The move will enable House of Fraser to offer online banking services to shoppers.

Tandem was founded in 2014 and received its UK banking licence a year ago. It has already raised over $30m from investors, including eBay co-founder Pierre Omidyar. Founded in 2014, Tandem raised £1m last year in a crowdfunding campaign, valuing it at £65m.

Tandem competes with other new app-only start-up banks, dubbed “neobanks”, including Monzo, Starling and Atom. It currently offers a savings tool that lets people monitor spending on any bank account. It began rolling out its app in November 2016 and plans to launch credit and debit products in 2017.

House of Fraser was acquired by Chinese conglomerate Sanpower in a £480m deal in 2014. While the company already offers credit and loyalty cards through NewDay, the ability to offer app-only online banking services is a departure that could see other UK retail multiples follow suit.

UK FCA to publish consultation paper on new rules for investment and loan-based crowdfunding platforms

Jan 05 2017

By Tom R. Wallace

In December 2016 the UK FCA published a statement of its intention to publish a Consultation Paper in Q1 2017 proposing new rules for investment and loan-based crowdfunding platforms.

Based on information the FCA has gathered through a consultation ending in September 2016 and its supervision and authorisation of crowdfunding platforms, the FCA’s view is that aspects of the crowdfunding market currently pose some risks to its objectives. The FCA perceives risk of regulatory arbitrage in the loan-based sector, and potential for investors to misunderstand the nature of the products offered. While respondents to the FCA’s request for feedback rightly note that many of these risks existed when the FCA established the current crowdfunding regulatory framework in 2014, the FCA counters that the market has grown in significance and complexity since then.

While investment-based crowdfunding is facilitated entirely by fully-authorised firms, most loan-based crowdfunding firms, including the largest ones, have so far operated under interim permissions. The FCA notes that, while it has identified some issues about the investment-based crowdfunding market, most of its attention at this time is on issues in relation to loan-based crowdfunding.

Taken together with its other statements on the crowdfunding sector, the FCA is giving an indication of its perspective on the issues associated with the #crowdfunding market and, pending publication of consultations on the new rules, incumbents and innovators should take care to create legal, operational and compliance structures that are likely to align with the FCA’s direction of travel in this market.

The FCA frame this as an evolution of the existing regulatory framework, not a revolution, and I find the FCA’s depth of the knowledge about, objectives for and focus on the market to be a source of optimism for the future of the crowdfunding market in the UK for investors, incumbents and innovators.

European Commission launches Task Force on Financial Technology

Nov 22 2016

By Jonathan Lawrence

On 14 November 2016, the European Commission launched an internal Task Force on Financial Technology (TFFT) that aims to assess and make the most of innovation in the FinTech area, while also developing strategies to address the potential challenges that FinTech poses. The work of this Task Force builds on the European Commission’s goal to develop a comprehensive strategy on FinTech. It appears to take a cautious approach. The launch statement warns that “technological development provides great opportunities for existing financial institutions, alternative service providers and new business models, provided that any risks are carefully managed”. This internal Task Force will bring together the expertise of European Commission staff across several areas, such as financial and digital services, digital innovation and security, and competition and consumer protection. It will also engage with stakeholders and present policy suggestions and recommendations in the first half of 2017.

Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union said:

“we see technological innovation in finance as a development that we need to encourage and enable. It brings huge opportunities for consumers and for industry, both by established players and new Fintech firms. Our Task Force will help us make sure that our policy supports the pursuit of these opportunities, while addressing any risks that may emerge. Efficient financial markets need to make the best possible use of the opportunities that technology presents, while also preserving competition and making sure that new operating systems are safe.”

Commissioner for Digital Economy and Society Günther H. Oettinger said:

“Digital innovation is transforming the entire economy and in particular the financial services sector. It disrupts business models and value chains, leads to the emergence of new players and services. The Digital Single Market strategy aims at laying down an appropriate framework and enabling solutions concerning for instance electronic authentication or cyber-security. Our ambition is to foster financial innovation while preserving financial stability and protecting consumers and investors.”

EU Fintech developments

Apr 19 2016

By Jacob Ghanty

In the linked article, Jacob Ghanty discusses some UK and EU regulatory developments affecting the FinTech sector. This article was first published on Thomson Reuters Regulatory Intelligence on 1 April 2016.

Banks Partnering with Fintech Startups – Deutsche Bank, ANZ Bank

Feb 23 2016

By Jim Bulling

The banking industry is expressing overwhelming support for the development and use of new technologies to improve the banking experience and have expressed their desire to enter into partnership with Fintech businesses.

Tag:FinTech