It would seem that the advancement of fintech is going to see a number of collaborations among global regulatory bodies. This comes as the Canadian Securities Administrators (CSA) has signed a fintech co-operation agreement with the Financial Supervisory Commission of Taiwan (FSC). The deal was announced formally on June 11, 2020.
Fintech Development Across Taiwan and Canada
This is not the first of such agreements that the FSC has signed with international regulators but the fourth. They have previously signed similar deals with Poland, the US State of Arizona, and France. The CSA, on their end, acts as the securities regulatory authorities in Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Québec, and Saskatchewan.
There are a number of implications embedded in this new agreement. First, it acts as an extension of the CSA Regulatory Sandbox Initiative and the FSC FinTech Regulatory Sandbox. Besides this, it will also involve referrals for innovative businesses and will also foster and define information sharing.
As part of the referral process, startups will be recommended from one jurisdiction to another. There will also be the support to enable the understanding of regulations in each jurisdiction. Finally, information relating to innovations in the financial services sector will be shared.
Fintech businesses in Canada and Taiwan will, therefore, be able to spread into each other’s markets. The CSA Regulatory Sandbox that will be expanded upon was created to offer innovative products and services in Canada. Under this sandbox, firms could be exempt from securities requirements in order to test their products and services for a brief time.
Taiwan Expanding Fintech Solutions
Besides its regulatory sandbox and the new deal with Canada, Taiwan has made moves in the recent past to improve fintech in the country. For example, in May 2020, the Financial Supervisory Commission of Taiwan published new guidelines for Security Token Offerings (STOs).
The new regulations have been controversial, however, as some investors believe it will shut them out of the market. Only accredited investors are allowed to participate in STOs. Furthermore, the limit of NT$300,000 for STOs is considered too strict by some critics of the law.
Despite the criticism, the law is a step to regularize STOs and this can be helpful to smaller businesses who cannot opt for IPOs. Also, in March 2020, Taiwan’s Financial Supervisory Commission approved a trial for blockchain in the insurance sector. The trial will allow policyholders to have their information updated across multiple insurance brokers automatically.
If a customer changes their address, all insurance brokers with which they have an account will be updated at once. If they file a claim, the blockchain will inform all the others as well. This aims to simplify the process of data collection and reporting for both consumers and insurance companies.
COVID-19 and its Effect on Fintech Adoption
It is remarkable that fintech adoption has continued this year despite the COVID-19 outbreak. However, recent reports suggest that not only has the virus not slowed down the growth of fintech but might have actually helped it. There are a number of purported reasons for this.
One of the first is the inherent innovation and adaptability of fintech. This has allowed the industry to adjust the change in the business climate. Besides this, the effects of COVID-19 created a prime environment for fintech to thrive.
Lockdown measures around the world meant that businesses had to move their operations online. This also meant that consumers had to access financial services online. Needless to say, fintech has been embraced on a large scale as a result and this is predicted to continue post-lockdown.
Do you think fintech will benefit from these partnerships? Is Taiwan the next place to watch for fintech growth? Let us know your thoughts below.