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Regulatory Tools to Encourage FinTech Innovations: The Innovation Hub and Regulatory Sandbox in International Practice

Author

Listed:
  • Péter Fáykiss

    (Magyar Nemzeti Bank)

  • Dániel Papp

    (Magyar Nemzeti Bank)

  • Péter Sajtos

    (Magyar Nemzeti Bank)

  • Ágnes Tõrös

    (Magyar Nemzeti Bank)

Abstract

In our study, we assess the regulatory tools that can be applied to encourage FinTech innovations, also focusing on the aims of financial stability. After reviewing the opportunities and risks of FinTech innovations from micro- and macro-prudential aspects and in terms of consumer protection, we present the kinds of possible regulatory responses to the challenges raised by FinTech phenomena and the regulatory tools which are applied in international practice. We analyse these practices from the aspect of legal implementation, detailing their similarities and differences. Finally, we briefly present Hungarian regulatory initiatives encouraging FinTech innovations. An assessment of international cases reveals that there is no generally effective, standardised solution that meets every geopolitical requirement: when the concepts are developed, the special features of the financial intermediary system of the given country and the level of financial culture must also be taken into account.

Suggested Citation

  • Péter Fáykiss & Dániel Papp & Péter Sajtos & Ágnes Tõrös, 2018. "Regulatory Tools to Encourage FinTech Innovations: The Innovation Hub and Regulatory Sandbox in International Practice," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 17(2), pages 43-67.
    • Handle: RePEc:mnb:finrev:v:17:y:2018:i:2:p:43-67
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    References listed on IDEAS

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    Cited by:

    1. János Müller & Ádám Kerényi, 2019. "The Need for Trust and Ethics in the Digital Age – Sunshine and Shadows in the FinTech World," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 18(4), pages 5-34.
    2. Johannes Treu, 2023. "The Chance of FinTech to be a New General-Purpose Technology," International Business Research, Canadian Center of Science and Education, vol. 16(11), pages 1-22, November.
    3. William J. Luther, 2022. "Regulatory ambiguity in the market for bitcoin," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(1), pages 1-14, March.
    4. Lee, Sungdo & Seo, Yongseok, 2022. "Exploring how interest groups affect regulation and innovation based on the two-level games: The case of regulatory sandboxes in Korea," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    5. Ádám Kerényi & János Müller, 2019. "Brave New Digital World? – Financial Technology and the Power of Information," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 18(1), pages 5-32.
    6. Péter Fáykiss & Lívia Ónozó, 2020. "Analysis of the Export Activity of Hungarian FinTech Companies," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 19(4), pages 60-82.

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    More about this item

    Keywords

    financial stability; fintech; innovation hub; regulatory sandbox;
    All these keywords.

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • F39 - International Economics - - International Finance - - - Other

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