Global regulators are struggling to define fintech credit
This story was delivered to Business Insider Intelligence “Fintech Briefing” subscribers. To learn more and subscribe, please click here.
While many jurisdictions have highlighted fintech credit as a key development in the nonbank financial space over the last year, they struggle to define exactly what fintech credit is, per findings of the Financial Stability Board’s (FSB’s) Global Monitoring Report on Non-Bank Financial Intermediation 2018.
FSB’s annual monitoring exercise features a case studyon the role of online platforms in facilitating or extending credit, which is based on a survey of 23 respondents in participating jurisdictions. The report also presents estimates that $284 billion in fintech credit was extended across the globe in 2016.
Here are the key findings of FSB’s case study on fintech credit:
Only an approximate 25% of responding jurisdictions have either a formal or informal definition of fintech credit. While almost all participating regulators reported some fintech credit activity — with peer-to-peer (P2P) lending platforms being most commonly cited — jurisdictions are failing to properly define fintech credit. As a result, regulators are having a hard time gathering data on this source of finance. And while 57% of respondents already collect some data on these firms, nearly half have plans to enhance data collection.
Just one-third of respondents reported regulations specifically aimed at fintech credit entities. While 65% of participating regulators said that fintech credit firms are dependent on registration or licensing approvals to operate, most requirements are not unique to them — they’re similar or the same to those relevant to other nonbank financial firms.
Only 35% of respondents capture fintech credit in their national financial accounts, while the size of this credit is likely widely varied across jurisdictions.The limited data available to FSB (only 17% of respondents provided data) still suggests that …read more
Source:: Business Insider