Policy Principles for Fintech

Financial technology, or fintech, innovations are poised to radically improve how consumers and businesses transfer money and make payments, record the value of their assets, save and invest, borrow, and insure themselves against risk. However, there are a number of challenges confronting the development of fintech, including a complex regulatory environment that was designed for older business models and is slow to adopt change.

To address these challenges and capture the full benefits of financial innovation, policymakers should work to encourage the growth of fintech. This report offers 10 principles to guide policymakers in their approach to this innovative new sector:

1. Support fintech transformation;
2. Work to ensure that regulations encourage innovation in financial services;
3. Remove duplicative regulations in financial services;
4. Regulate fintech at the national level;
5. Use regulatory enforcement actions to incentivize fintech companies to protect consumers;
6. Create tech-neutral rules for fintech;
7. Create a level playing field between incumbents and new entrants;
8. Promote cybersecurity in fintech;
9. Support standards development and financial data interoperability;
10. Promote international harmonization of laws affecting the financial services sector.