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Fin-Tech sector expected to boost by MENA market regulators

The study, which is the second in a series of three, reviewed how regulators are meeting Fin-Tech and wider digital financial services challenges in their jurisdictions

To put in place frameworks those enable the development of the Fin-Tech sector in the region, support and efforts have been boosted by Middle East and North African (MENA) market regulators after the COVID-19 pandemic.

Regulators in MENA consider Fin-Tech to be more “supportive to their objectives” than the global average, the Cambridge Centre for Alternative Finance (CCAF) said in its latest survey of regional regulators.

In terms of market development, the difference is “striking”, with 85 per cent of MENA regulators perceiving that Fin-Tech is favourable to their objective, compared to 61 per cent globally. In promoting competition, 62 per cent of regional regulators favoured it compared with 47 per cent globally, CCAF University of Cambridge said in the report.

“In the Middle East and North Africa region, regulators have taken positive steps to create an enabling environment for Fin-Tech through a combination of regulatory frameworks and regulatory innovation initiatives”, said Robert Wardrop, director and co-founder of the CCAF.

“This study assesses how a range of Fin-Tech activities are regulated in the region, including understanding which regulators have a mandate for specific Fin-Tech verticals, and whether activities are regulated by existing or bespoke frameworks, as well as noting which regulators plan to introduce regulatory frameworks in the near term”.

The study, which is the second in a series of three, reviewed how regulators are meeting Fin-Tech and wider digital financial services challenges in their jurisdictions.

It considered regulatory frameworks for e-money, digital payments, peer-to-peer (P2P) lending, and equity crowd funding and international remittances. It also analysed existing frameworks for cross-sector themes that affect Fin-Tech, including data protection, anti-money laundering (AML), cyber security, financial consumer protection, electronic know-your-customer (e-KYC) and open banking.

46 per cent of regulators surveyed introduced new measures relating to KYC, AML and digital identity as a response to the challenges related to the pandemic. Almost half of them have launched initiatives to support economic relief, 38 per cent took measures for business continuity and 23 per cent beefed up cyber security.

During the pandemic, three quarters of respondents “perceived” an increase in cyber-security risk related to Fin-Tech. It is in addition to a perceived increase in operational risks (67 per cent), fraud and scams (33 per cent) and consumer protection risks (25 per cent).

Concerns of MENA regulators in terms of cyber-security and operational risks were mostly in line with their peers around the world.

With 8 per cent of these specific to digital payments, more than 90 per cent of jurisdictions sampled in the study have established regulatory frameworks for payments. In terms of the level of business and start-up activity, this underlines the dominance of the payments subsector relative to other Fin-Tech verticals.

Similarly, with 42 per cent creating a specific framework for the purpose and 50 per cent regulating through a general payments framework, 92 per cent of MENA jurisdictions have regulatory frameworks in place for e-money, the report added.

As to data protection, an area of concern elevated by the pandemic, 69 per cent of sampled jurisdictions have a broad framework in place, with a further 23 per cent planning to introduce one.

“The MENA region has seen a rapid increase in Fin-Tech activity and there is evidence of regulators adapting”, said Alexander Apostolides, acting lead of regulatory innovation at CCAF.

“However, the existence of regulatory frameworks is uneven, both in Fin-Tech verticals and in terms of jurisdictions”.

Also readCIO News interviews Shri Wangki Lowang, Minister (IT) of Arunachal Pradesh

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CIO News, a proprietary of Mercadeo, produces award-winning content and resources for IT leaders across any industry through print articles and recorded video interviews on topics in the technology sector such as Digital Transformation, Artificial Intelligence (AI), Machine Learning (ML), Cloud, Robotics, Cyber-security, Data, Analytics, SOC, SASE, among other technology topic

khushbu
Khushbu Sonihttps://www.cionews.co.in
Chief Editor - CIO News | Founder & CEO - Mercadeo

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