Regulatory Sandboxes and Innovation Hubs for FinTech

The Policy Department for Economic, Scientific and Quality of Life Policies has prepared a document on Regulatory Sandboxes and Innovation Hubs for FinTech focusing on the models adopted in the EU and the EFTA countries at the request of the Committee on Economic and Monetary Affairs(ECON).

The increasing use of technology in finance (‘FinTech’) has challenged the existing institutional and regulatory arrangements in the financial sector. In response to these FinTech developments, jurisdictions across the globe have adopted the setting up of regulatory sandboxes and innovation hubs as part of their overall strategies to keep abreast of the rapid technological developments and to encourage the development of their FinTech ecosystems.
The study aims to provide an overview of the level of dissemination and the key elements of the design and operational parameters of these so-called 'innovation facilitators'.
Moreover, it discusses certain proposals for strengthened coordination at EU level to mitigate the risk of diverging supervisory practices and market fragmentation and to contribute to the formulation of a EU-wide policy response to FinTech.

The complete document can be found here.