Regulating Financial Services in an Era of Technological Disruption

Law in Context, Vol 36, Issue 2, 2019 DOI:10.26826/law-in-context.v36i2.98

24 Pages Posted: 21 Apr 2020

See all articles by Louis de Koker

Louis de Koker

La Trobe Law School

Nicholas Morris

La Trobe Law School

Sue Jaffer

La Trobe Law School

Date Written: December 2, 2019

Abstract

Financial regulators are challenged to respond to the innovation opportunities presented by financial technology (fintech). Current rules are not necessarily sufficient or effective to adequately regulate new business models and new products relating to innovations such as crypto assets or digital financial services. Regulators that fail to respond in a timely manner may drive innovation offshore and deprive their markets and consumers of appropriate, new services. To respond to new financial innovation, regulators have been establishing innovation hubs and regulatory sandboxes. Innovation hubs enable them to engage innovators more effectively. Sandboxes allow the products to be tested in a controlled environment and enable regulators to consider whether existing laws are appropriate to regulate such products and, if not, what measures may be required. Sandboxes are however resource intensive and they hold a number of risks. Financial regulators are, of course, not alone in having to address the regulatory challenges of innovation. This article therefore also considers other non-financial regulatory experiences of innovative products and services, namely automated vehicles; emissions trading in China; and Uber and its clones, to consider whether those experiences hold lessons for financial regulators.

Keywords: Fintech, Regulation, Innovation, Regulatory sandbox, Innovation hub

Suggested Citation

de Koker, Louis and Morris, Nicholas and Jaffer, Sue, Regulating Financial Services in an Era of Technological Disruption (December 2, 2019). Law in Context, Vol 36, Issue 2, 2019 DOI:10.26826/law-in-context.v36i2.98, Available at SSRN: https://ssrn.com/abstract=3561389

Louis De Koker (Contact Author)

La Trobe Law School ( email )

La Trobe University
Bundoora, VIC 3083 3142
Australia

Nicholas Morris

La Trobe Law School ( email )

Plenty Road
Bundoora
Melbourne, VIC 3072
Australia
0413546213 (Phone)

Sue Jaffer

La Trobe Law School ( email )

Plenty Road
Bundoora
Melbourne, VIC 3072
Australia
0413546213 (Phone)

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