Reserve Bank talks up FinTech regulation

South African Reserve Bank deputy governor Francois Groepe has revealed that there are three proposals regarding FinTech regulation currently on the table during a keynote address at the Strate GIBS FinTech Innovation Conference.

Although the Reserve Bank has been monitoring FinTech developments since 2013 and has suggested that it is open to the concept of a national digital currency, there is no regulatory framework for FinTech in the country and no consensus on its true potential. However, this month, it established a broader FinTech unit to review and assess emerging technologies and user cases.

To strengthen the regulatory approach, Groepe proposed that regulators focus analysis on activities involving financial services rather than on firms or technologies, continue collaborating with local and global regulatory authorities and investigate and decide on the most appropriate structures to keep abreast of developments and to allow for demonstration and experimentation with user cases.

"Given the pace of change, regulators, like most mortals, may find it hard to remain up to date with these developments; we are faced with the daunting prospect of having to reflect on the most appropriate regulatory responses to technologies that we may not fully comprehend yet," said Groepe, according to Moneyweb.

"The regulated activities should fall within the ambit of their regulatory mandate and would typically include deposit taking, payments, lending, insurance, and investments.

"Regulation must be appropriate, purposeful and smart, and it must aim to ensure a level playing field. Regulations should not be an impediment to progress, competition, or efficiency."

Groepe said the Reserve Bank was committed to being a thought leader on the global stage.