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ADB’s tool kit provides guidelines for safe adoption of fintech

The Asian Development Bank (ADB) has developed a Fintech Policy Tool Kit to help regulators and policy makers in Asia and the Pacific get the most out of the emerging technologies. The tool kit has been prepared as part of ADB’s support to knowledge work on digital financial services among its developing member countries.

Noting that increased adaptation and speed of fintech developments carry substantial risks that call for regulators and policy makers to balance the promotion of innovation and invention, financial stability, and customer protection, the ADB report highlights the need for innovators, investors, and consumers to feel safe and build trust.

To apply appropriate safeguards and mitigate risks, regulators and policy makers must therefore understand, monitor, and supervise the fast evolving, technology-driven developments. Appropriate tools and solutions— including new technologies such as regtech and suptech for managing regulatory processes and supporting supervision—will greatly help.

The Fintech Policy Tool Kit aims to help citizens, businesses, and governments realize an inclusive fintech ecosystem for robust economic growth, greater equality, and lower poverty during these challenging times. With appropriate legal and regulatory frameworks, policy makers and regulators hold the keys to enabling expansion of inclusive fintech services. 

To support this objective, the tool kit aims to help regulators and policy makers understand the following about fintech: 

  • The latest developments: Especially advances in payment technologies, blockchain, security and identity, personalized advice platforms, machine learning, artificial intelligence, cloud technologies, and open application programming interfaces (APIs).
  • Support for financial inclusion: This includes access, use, and quality of services. This is especially so in digital payments, personal financial management, digital financial literacy tools, digital savings products and services, digital banking, alternative digital finance and credit, credit scoring and data analytics, insurance technologies, digital and crypto assets, and central bank digital currencies. 
  • Support for the SDGs: This specifically includes those for ending hunger, achieving food security, and promoting sustainable agriculture, protecting health, gender equality and economic empowerment of women, economic growth and jobs, supporting industry, innovation, and infrastructure, reducing inequality, and building partnerships to implement the SDGs. 
  • Development of an appropriate regulatory and policy environment, which looks at policy enablers, enabling technologies, and specific fintech activities. 
  • Approaches to developing appropriate supervisory capacity especially as it relates to regulatory technologies (regtech) and supervisory technologies (suptech).

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