A common refrain among entrepreneurs is that regulators struggle to keep pace with the innovations that they’re working on. Nowhere is this more pressing than in the fintech world, where effective regulation is often a prerequisite for entry into the market.

A recent report from Cambridge Judge Business School highlights how important regulation is to the promotion of financial inclusion and the utilization of technology to effectively manage evolving consumer risks.

Managing developments

The paper aims to provide insights that can assist regulators in evaluating, benchmarking, and prioritizing their policy responses to the developments emerging in the fintech space. The study relies on a survey of around 130 financial authorities from over 100 jurisdictions around the world.

“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,” the researchers explain. “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.”

It highlights that Covid continues to drive developments, especially in emerging markets. There remain considerable concerns, however, especially in terms of mitigating both existing and new consumer risks, especially in areas like cybersecurity.

The survey also highlights the important role being played by Digital Regulatory and Supervisory Infrastructure (DRSI) alongside supervisory technology initiatives. These are playing a key role in supporting and enabling the various financial authorities as they attempt to deal with the wave of fintech innovations, especially in areas such as consumer protection.

”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,” the researchers conclude. “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.”