The Financial Supervisory Commission under Chairman Wellington Koo (顧立雄) has recently struck a more flexible policy stance toward the implementation of financial technology, or “fintech,” in Taiwan.
In an Oct. 7 meeting with a fintech trade association, commission officials agreed that rules governing fintech development need to be modified, given the progression of the financial sector and the structure of the nation’s economy.
At the Legislative Yuan’s Finance Committee meetings last week, the commission confirmed that Koo met with representatives from the Taipei City Government and Taiwan Financial Services Roundtable on Tuesday to discuss potential sites for a fintech innovation park in Taipei, with the aim of building an industrial cluster where businesses could test fintech concepts.
Lawmakers are working on a preliminary review of a draft bill for a “regulatory sandbox,” which would allow businesses to experiment with fintech innovations in a loosely regulated environment.
Whether a new law is drafted or existing regulations are amended to allow for fintech development, the matter entails a time-consuming — if not extremely bureaucratic — process.
Developing an industrial cluster for this emerging industry will also require money from all parties involved, but the commission’s efforts to promote fintech development in Taiwan are necessary, as the financial sector must keep pace with the fast-changing global market and retain its professionals. The move might also encourage non-financial enterprises to develop innovative products that respond to consumer demand for better services.
There is no question that fintech has become a hot topic, but a report released by the Taipei-based China Credit Information Service last week showed that Taiwan’s financial holding companies appear to be much less committed than their regional peers to this new wave of innovation.
The report said that the financial holding firms spent a combined NT$1.25 billion (US$41.3 million at the current exchange rate) on fintech development last year, or 0.37 percent of the US$11.2 billion spent by their peers in Asia.
Taiwan has a long way to go to catch up with its regional neighbors in fintech investment. Practical concerns over earnings and sales increases, as well as difficulties in transforming fintech ideas into marketable applications, have hindered local institutions from making larger investments in fintech.
Conventional financial services are facing comprehensive changes due to technological advances in mobile communication, big data, cloud computing and artificial intelligence. Rapid advances in digital technology are creating opportunities and challenges for consumers, service providers and regulators unlike anything seen in the past 100 years.
Many question whether, apart from better and innovative services, fintech can address consumer concerns about trust, security and privacy. If financial institutions cannot earn customer trust, how can they expect customers to visit their brick-and-mortar outlets — let alone their digital platforms?
Although there are no quick fixes for this concern, as Taiwan’s fintech development is in its early stages, one certainty is that fintech legislation must be nimble, timely and accommodative.
Meanwhile, the commission must carefully balance the trade-off between efficiency and stability in the face of the rapid changes in the financial sector.
Most importantly, while paying attention to possible disruptions and risks in the financial landscape, the commission must diligently protect consumers in this era of digitization in financial services and ensure that fintech services providers can comprehensively address the issues of security and privacy.
Could Asia be on the verge of a new wave of nuclear proliferation? A look back at the early history of the North Atlantic Treaty Organization (NATO), which recently celebrated its 75th anniversary, illuminates some reasons for concern in the Indo-Pacific today. US Secretary of Defense Lloyd Austin recently described NATO as “the most powerful and successful alliance in history,” but the organization’s early years were not without challenges. At its inception, the signing of the North Atlantic Treaty marked a sea change in American strategic thinking. The United States had been intent on withdrawing from Europe in the years following
My wife and I spent the week in the interior of Taiwan where Shuyuan spent her childhood. In that town there is a street that functions as an open farmer’s market. Walk along that street, as Shuyuan did yesterday, and it is next to impossible to come home empty-handed. Some mangoes that looked vaguely like others we had seen around here ended up on our table. Shuyuan told how she had bought them from a little old farmer woman from the countryside who said the mangoes were from a very old tree she had on her property. The big surprise
The issue of China’s overcapacity has drawn greater global attention recently, with US Secretary of the Treasury Janet Yellen urging Beijing to address its excess production in key industries during her visit to China last week. Meanwhile in Brussels, European Commission President Ursula von der Leyen last week said that Europe must have a tough talk with China on its perceived overcapacity and unfair trade practices. The remarks by Yellen and Von der Leyen come as China’s economy is undergoing a painful transition. Beijing is trying to steer the world’s second-largest economy out of a COVID-19 slump, the property crisis and
Former president Ma Ying-jeou’s (馬英九) trip to China provides a pertinent reminder of why Taiwanese protested so vociferously against attempts to force through the cross-strait service trade agreement in 2014 and why, since Ma’s presidential election win in 2012, they have not voted in another Chinese Nationalist Party (KMT) candidate. While the nation narrowly avoided tragedy — the treaty would have put Taiwan on the path toward the demobilization of its democracy, which Courtney Donovan Smith wrote about in the Taipei Times in “With the Sunflower movement Taiwan dodged a bullet” — Ma’s political swansong in China, which included fawning dithyrambs