European Central Bank working on new fintech licensing guidelines

Mobile payment apps to cryptocurrencies are focusing the ECB into a sector lacking in regulation

Fintech firms such as Bitcoin have been stealing market share from more heavily regulated traditional finance firms
Fintech firms such as Bitcoin have been stealing market share from more heavily regulated traditional finance firms

The European Central Bank is working on new licensing guidelines that would also cover financial technology firms, Daniele Nouy, the ECB’s top bank supervisor told a conference on Wednesday.

The fintech sector, though still relative small, has been stealing market share from traditional lenders in a variety of sectors from payments to lending, attracting investment $6.5bn (£4.9bn) in the first half of the year.

“At the ECB, we are, for instance, devising a guide on licensing that also covers fintechs,” Ms Nouy told a conference. “This guide will be published shortly for the purpose of a public consultation.”

“The technical and financial hurdles have become a bit lower; the (banking) market has become more contestable,” Ms Nouy added.

The nascent industry, ranging from mobile payment apps to ‘cryptocurrencies’ like bitcoin, is seen playing a crucial role in the future of financial services but regulators are still searching for ways to properly supervise a sector that has largely flown under their radar.

Reuters

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