TAIPEI (Taiwan News)—FinTech, a new up and coming financial service trend, is defined as any disruptive financial technology innovation, such as mobile payment, investment bots, and blockchain services.
However, strict financial regulations remain the biggest hurdle for the industry in Taiwan to move forward, agreed experts familiar with the issue that gathered at Hit FinTech forum organized by Chinese-language Knowing media, Thursday.
Ruling Democratic Progressive Party (DPP) lawmaker Karen Yu (余宛如) noted if Taiwan passes FinTech laws, it will become the fifth country in the world to pass third party payment regulations.
She outlined seven ways that FinTech was disrupting the financial industry:
- From Know Your Customer (KYC) to Know Your Device (KYD).
- Shift from protecting consumers to prioritizing their needs.
- Paradigm shift of risk management to deregulating centralized management.
- Integration within and outside the FinTech industry.
- Moving from cross-regional collaboration to cooperation without borders.
- Changing technology regulations.
- From strengthening regulations to improving effectiveness of regulations.
All of the above-listed points require new laws to keep up with the technology changes, said Yu, who has advocated lifting financial regulations in banking, insurance, stock investments and others to make it easier for non-financial technology companies and entrepreneurs to provide innovative financial services.
However, she was fully aware that any attempt to replicate UK’s regulation sandbox model in Taiwan might not work under the nation’s legal framework or culture.
"It will always be impossible for legal regulations to be ahead of technology developments," said opposition Kuomintang Legislator Jason Hsu (許毓仁).
Hsu has been working on introducing a Digital Economy Act and Bill similar to that of UK, and views the digital economy as a national strategy that requires cooperation between all political parties. A third party payment regulation should gradually be in place.
He urged different party politicians to set aside their ideological differences and agree on working on long-term national policies that would remain unaffected when new administrations are elected.
Jaclyn Tsai (蔡玉玲), founder of the law firm Lee, Tsai and Partners (理慈國際科法事務所), has an opinion that was slightly different.
She recommended the government just compile a list of actions considered illegal or grave violations in the FinTech industry, and leave the industry alone to explore technology innovations.
Tsai advocated for minimal supervision from the government in FinTech developments, a sentiment echoed by other panelist experts, such as KMT lawmaker Chiang Wan-an (蔣萬安).
Many other experts also called for the government to step back from detailed regulations and instead draft a general guideline for new FinTech startup companies to follow.
Tsai also suggested different government organizations need to collaborate and work together on FinTech regulations, including the Ministry of Science and Technology, Ministry of Economic Affairs and others.
Several experts emphasized that FinTech will require better regulations that safeguard personal private information that might be collected by third party payment services and sold to companies without the consent or knowledge of users.