Lawmakers across party lines and start-up ecosystem builders yesterday urged the government to improve its approach toward fostering the local development of financial technology (fintech) and other innovations, beginning with “regulatory sandbox” legislation.
The nation’s window of opportunity to become a major regional hub for innovative technologies might be closing soon, given the government’s penchant for following international trends, AppWorks Ventures (之初創投) founding partner Nice Cheng (程九如) said at a forum in Taipei.
The five years it took local developers to receive government approval to operate third-party payment services delayed adoption by consumers, Cheng said, adding that the legislative process has been bogged down by a requirement to hold redundant public hearings that do little to promote consensus.
While progress has stalled in Taiwan, innovative services have flourished abroad, he said.
About 415,000 credit cards were registered on Apple Inc’s electronic payment platform, Apple Pay, in its first two days on the local market, he added.
Regulators have arbitrarily set high barriers to entry for many start-ups, such as minimum capitalization and revenue requirements, Cheng said.
Chinese Nationalist Party (KMT) Legislator Jason Hsu (許毓仁) said at the forum that the government should stop fixating on establishing a full set of regulations for fintech and other innovative industries.
Instead, the government should establish a basic law that would serve as a guideline for the development of a digital economy and as a basis for legislation to adapt to changing market trends, in a bid to resolve disputes over sharing-economy services, such as those provided by Uber Technologies Inc, Hsu said.
Democratic Progressive Party (DPP) Legislator Karen Yu (余宛如) said that while the Financial Supervisory Commission has been receptive of the idea of supporting fintech development and has promised to encourage state-run banks to prioritize procurement of locally developed fintech solutions, it remains to be seen whether the regulator would be able carry out the task, which would require cross-departmental efforts.
The commission’s “regulatory sandbox” bill gleans insights from precedents in Britain to promote experimentation in new financial services and products, but there could be disastrous results if the government misunderstands and deviates from examples it is trying to learn from, Yu said.
Efforts to foster innovation remain challenged by the nation’s immense bureaucracy, she said.