FinTechs crossing the line into financial services provision, warns regulator

Some FinTech companies have developed into formal financial services providers meaning they must ensure they comply with regulatory expectations according to the Hong Kong Securities and Futures Commission (SFC).

Speaking during Hong Kong FinTech week, senior director of risk and strategy at SFC Bénédicte Nolens stressed that FinTechs are no longer viewed just as technology or information platforms.

“New FinTech business models often are a lot more than technology or information platforms, and instead deliver financial services as defined in standing rules and regulations,” said Nolens.

“For FinTech start-ups, this means they need to understand and comply with regulatory expectations, including those in overseas markets where their offering is advertised.”

The emergence of FinTech has been a constantly recurring theme within current industry coverage with Asia emerging as a leading FinTech hub.

Earlier this week blockchain firm R3 revealed plans to collaborate with the Monetary Authority of Singapore (MAS) to launch the first distributed ledger technology (DLT) centre of excellence in Asia.

“New FinTech business models already operate across borders, or it is highly likely they will want to expand into other global markets, “ said Nolens.

“It is important for regulators to communicate globally, so as to better anticipate how these new business models intersect with jurisdictional regulation.”

Nolens also stressed that in spite of increased automation by firms, FinTech developments should be “properly documented, understood and supervised by humans.”