Financial regulators have recognised the role that fintech initiatives have in promoting financial inclusion as economies recover from the COVID-19 crisis. The news comes from a survey by The Cambridge Centre for Alternative Finance (CCAF) and the World Bank.
The CCAF ‘Global Fintech Regulator Survey‘ highlights how the COVID-19 pandemic continues to be highly influential for financial authorities prioritising fintech business models. The trend was particularly found in Emerging Markets and Developing Economies (EMDEs).
Fifty-six per cent of survey respondents from EMDEs currently increasing the priority of fintechs. This is much higher than in more advanced economies, in which 35 per cent are prioritising fintechs.
The area that most valued fintechs for this purpose was in Sub-Saharan Africa, where 75 per cent of respondents noted an increase in fintech prioritisation.
A study of the survey results also found that concerns about consumer risks remain among financial authorities. Seventy-eight per cent of respondents are concerned about cybersecurity. Furthermore, 67 per cent are concerned about fraud and scams; a number dramatically higher than the 18 per cent with the same concerns in the 2020 survey. Concerns also exist in the digital assets sector.
The survey by CCAF at the University of Cambridge Judge Business School and the World Bank looks to provide information that regulators can use to benchmark, evaluate and prioritise policy responses to fintech developments. CCAF surveyed 128 financial authorities in 106 jurisdictions worldwide. Just under 70 per cent of respondents were overseeing fintech developments in EMDEs.
Bryan Zhang, co-founder and executive director of the CCAF, shared his thoughts on the study. He explained: “This comprehensive dataset offers a unique view into the world of fintech regulators and their respective institutions at a time of rapid changes in digital financial services globally.”
“We hope that the data and insights generated from this global survey will inform the work and practice of fintech regulators, supervisors and policymakers, help them benchmark responses, frameworks and activities, and facilitate meaningful peer learning and knowledge exchange.”
Jean Pesme, global director of finance, competition and innovation from The World Bank Group, also commented. Pesme said: “At the World Bank, we see a growing demand from client countries for data-driven assessment tools of risk in financial services.”
”In addition to seeking insights into the management of persistent and emerging risks, the survey has also explored how and where regulatory authorities are using different types of digital infrastructures to enhance regulatory and supervisory functions.
“Understanding and mitigating risks is key; the survey and experience around the globe also demonstrate that this can be done while harnessing the tremendous potential of fintech for financial inclusion and access to finance.”