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FinTech and FinReg – new challenges for the financial market regulation system in Poland and globally

Abstract

Effective regulation of the financial market is clearly crucial to innovation and the future success of the financial services industry and, in particular, FinTech companies. PRIOR to the global financial crisis, financial innovation was viewed very Positively, resulting in multiple markets in the deregulatory approach to financial regulation. During the crisis, the regulatory pendulum swang to the other extreme. Dramatic technological change has spurred the development of financial technology companies (FinTech). FinTech and other financial services providers fundamentally challenge the current regulatory paradigm. Financial regulators are increasingly seeking to balance the traditional regulatory approaches to financial stability and consumer protection with promoting growth and innovation. The resulting regulatory innovations including technology, innovation hubs, regulatory sandboxes, and special charters. This paper analysis of new regulatory approaches, structured experimentalism (such as sandboxes), and the development of specific new regulatory frameworks. Effective financial market regulation is crucial for its innovation and the future position of FinTech in the financial services sector. Before the global financial crisis, financial innovation was perceived very positively, leading to the deregulation of many financial services markets. During the crisis, regulators’ attitudes have changed dramatically. Rapid technological change has stimulated the development of FinTech companies. FinTech and other financial services providers openly challenge the current regulatory paradigm. Supervisory authorities are increasingly seeking to balance the traditional regulatory approach to financial stability and consumer protection with the promotion of growth and innovation. The resulting regulatory innovations include technologies, innovation hubs, regulatory sandboxes and other individual solutions. The article analyses new regulatory approaches, structured experimentation (e.g. sandboxes...

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