IBS Journal May 2017


45


data’ (non-financial payment related information) and how that can be applied to open up access to the financial and payment ecosystem for those to whom it may have historically been closed due to a lack of formal credit history. One only needs to think about the amount of information available from schemes such as M-Kopa in Kenya, Tanzania and Uganda (which, as of July 2016, had connected over 450,000 homes to affordable solar power in return for daily payments) and how that could be used to build up a picture of credit worthiness for those involved.


This is, of course, closely linked to financial independence – a key plank in the battle against poverty and inequality – topics often far from the FinTech news in Europe but which are just as valid here in their own way. What’s also interesting is the level of collaboration involved in the FinTech industry. Not only are regulators in regular contact with one another, there are a growing number of strategic alliances being formed between startuos and more traditional incumbents, a trend we expect to continue in 2017 and reflected in some of the investments being made by established players in smaller FinTech organisations.


SupTech


The propensity to ‘tech’-ify all manner of concepts also continues to gather pace, with discussion now turning to the relatively nascent area of SupTech (tech specifically


designed for regulators and moving yet one step on from RegTech). Regulators are starting to look at the technology they are using and how tools can be rolled out to enhance their ability to monitor their charges more efficiently, with some forecasting an eventual move to real-time data sharing to facilitate this (Austria’s OeNB reporting initiative being cited as particularly interesting here).


FinTech, the use of Big Data and collaboration are all combining to present a myriad of growth opportunities for financial institutions across the globe, with regulators finding it challenging to keep up with the pace of technological change.


To help bridge this gap, there will need to be an effort by the private sector to convince regulators of the reliability of the tech being used and the checks and balances involved in the creation/operation of the bespoke algorithms underpinning these platforms. We may also see more of a ‘wait and see’/outcome- based approach to some regulation, rather than a prescriptive one, to try to keep pace with technological advances. Either way, with many emerging and established markets looking to the UK for direction, it’s an extremely interesting time to be working in the industry.


“FINTECHS ARE


DEVELOPING MUCH QUICKER THAN THE


REGULATORY ENVIRONMENT IN WHICH THEY OPERATE”


www.ibsintelligence.com


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