FinTech: Building a 21st-Century Regulator’s Toolkit
Chris Brummer and Daniel Gorfine
From new digital payment systems and the use of digital or electronic currencies to the use of data analytics and the creation of online investment and finance platforms, FinTech developments are already having an impact on traditional financial markets and services. Innovations are reshaping, at times fundamentally, how markets are structured, how investors receive and use information, how customers receive and use financial services, and how companies gain access to and use capital. Less discussed, however, is how the rise of FinTech challenges underlying precepts of existing regulatory approaches and requires fresh thinking about how regulation can best foster the responsible development of this industry.
This paper tackles some of these issues, outlines characteristics of FinTech that drive the need for fresh thinking about today’s regulatory approaches, and then details the pros and cons of alternative regulatory approaches and responses. Its goal is to catalyze efforts to provide policymakers with a modern “toolkit” that can keep pace with FinTech developments