1、Public Policy,Fintech and SMEs:Recommendations for Promoting a New Financing EcosystemAPEC Small and Medium Enterprises Working GroupAugust 2022Public Policy,Fintech and SMEs:Recommendations for Promoting a New Financing EcosystemAPEC Small and Medium Enterprises Working Group August 2022 APEC Proje

2、ct:SME 09 2019A Produced by A2F Consulting LLC 50 W.Montgomery Avenue,Suite 260 Rockville,MD 20850/USA Tel+1(301)907-9400 Email:infoa2f- For Asia-Pacific Economic Cooperation Secretariat 35 Heng Mui Keng Terrace Singapore 119616 Tel:(65)68919 600 Fax:(65)68919 690 Email:infoapec.org Website:www.apec

3、.org 2022 APEC Secretariat APEC#222-SM-01.1 3 TABLE OF CONTENTS 1 EXECUTIVE SUMMARY.11 2 INTRODUCTION.14 3 APPROACH&METHODOLOGY.16 4 STATE OF PLAY REGARDING REGULATORY AND SUPPORT PROGRAM APPROACHES.20 4.1 OVERVIEW OF THE REGULATORY ENVIRONMENT.20 4.2 STATE OF FINTECH ADOPTION.21 4.3 POLICY AND PROG

4、RAMS SUPPORTING FINTECH DEVELOPMENT.22 4.4 TECHNOLOGIES SUPPORTING FINTECH DEVELOPMENT.28 5 MAP OF CURRENT INITIATIVES TO EASE SMES ACCESS TO FINTECH.30 5.1 OVERVIEW.30 5.2 MAP OF CURRENT INITIATIVES.32 5.3 INNOVATIVE MODELS TO IMPROVE FINANCIAL INCLUSION.46 6 FINTECH GENDER INCLUSION.48 6.1 GENERAL

5、 TRENDS IN GENDER INCLUSION.48 6.2 IMPACT OF FINTECH POLICIES ON GENDER INCLUSION.49 7 REGIONAL CASE STUDIES.52 7.1 AUSTRALIA.52 7.2 CANADA.67 7.3 CHILE.80 7.4 COLOMBIA.93 7.5 HONG KONG,CHINA.102 7.6 INDONESIA.112 7.7 KENYA.122 7.8 MALAYSIA.132 7.9 MEXICO.145 7.10 THE PHILIPPINES.154 7.11 SINGAPORE.

6、164 7.12 THAILAND.176 7.13 USA.188 7.14 VIET NAM.198 8 PROMISING AVENUES FOR AN EFFECTIVE SME FINTECH POLICY LANDSCAPE.208 ANNEXES.211 ANNEX 1:SUMMARY OF APEC ECONOMIES AND NON-MEMBERS CORE FINTECH ACTIVITIES.211 ANNEX 2:DATA COLLECTION KEY INFORMANT INTERVIEW GUIDES AND QUESTIONNAIRES.217 4 LIST OF

7、 FIGURES Figure 1:Technology Enablers support the implementation policies for FinTech development.29 Figure 2:Banking Habits of Australians in 2020.54 Figure 3:Types of FinTech Enterprises in the Australian Ecosystem.59 Figure 4:Adoption of FinTech by Type.60 Figure 5:Business Banking Pain Points.60

8、 Figure 6:FinTech Adoption by SMEs.63 Figure 7:Barriers to Adopting FinTech Based Solutions.63 Figure 8:Gender Split and Usage of Financial Services.64 Figure 9:Total Pre-IPO Equity Investment Volume and Dollar Value of Canadian FinTech Companies from 2010-2020(in USD M).67 Figure 10:FinTech Adoptio

9、n Rates for 27 Economies.69 Figure 11:SMEs Key Issues.73 Figure 12:Breakdown of SME Financing in Canada.74 Figure 13:FinTech Sector Distribution.75 Figure 14:FinTech Gender Gap.77 Figure 15:Evolution of the Number of FinTech Firms.80 Figure 16:Age of FinTech Company.80 Figure 17:Size of FinTech Comp

10、anies.81 Figure 18:Number of Employees in FinTech Enterprises.81 Figure 19:Source of Funds of FinTech.82 Figure 20:Total Alternative Finance Volume of Leading(in millions of USD).82 Figure 21:Internal Impediments that FinTech Companies Faced.83 Figure 22:Main Challenges of FinTech Enterprises.83 Fig

11、ure 23:How Open are Investors/Individuals/Institutions to Adopting FinTech Solutions?.84 Figure 24:FinTech Subsectors Businesses Normally Invest in.84 Figure 25:Priority Areas for Regulation.86 Figure 26:FinTech Enterprises Distribution.89 Figure 27:Gender Split and Usage of Financial Services.90 Fi

12、gure 29:Colombia Fintech Distribution by Segment.93 Figure 29:DFS Services Usage in Colombia by Sector.95 Figure 30:GFCI 31 Top Ranks and Ratings.102 Figure 31:Main Areas of the FinTech Sector in Hong Kong,China.103 Figure 32:FinTech Adoption Rates.104 5 Figure 33:Total P2P Lending.112 Figure 34:Typ

13、es of FinTech Enterprises in the Indonesian Ecosystem.118 Figure 35:Gender Split and Usage of Financial Services.119 Figure 36:Use of Financial Services in Kenya Among Adults 15 or Older.124 Figure 37:Financial Inclusion by Gender in Kenya Among Adults 15 or Older.129 Figure 38:Borrowing by Gender i

14、n Kenya Among Adults 15 or Older.130 Figure 39:Composition of Malaysian FinTech Services.132 Figure 40:Smartphone Ownership in Malaysia as a Proportion of Total Population,2010-2025(projected).134 Figure 41:Differences in Financial Participation Among Malaysians by Gender.140 Figure 42:Growth in Mob

15、ile Banking by Total Transaction Value,2016-2020.142 Figure 43:Mexicos FinTech Growth per Year.145 Figure 44:Mexicos FinTech Companies by Sector.145 Figure 45:Mexicos FinTech Usage by Category.147 Figure 47:Mexicos SME Distribution by Gender.150 Figure 47:Philippine FinTech Companies by Sector.154 F

16、igure 48:MSMEs as a Proportion of all Philippine Businesses.159 Figure 49:Examples of Different Types of Philippine Crowdfunding Platforms.160 Figure 50:Singapore FinTech Growth.164 Figure 51:FinTech Sector Distribution.171 Figure 52:Evolution of R&D Spending in Terms of Percentage GDP.176 Figure 53

17、:Share of GDP by Enterprise Size.181 Figure 55:Composition of the ASEAN FinTech Sector.183 Figure 56:Thailand FinTech Sectors.183 Figure 56:Gender Split and Usage of Financial Services.185 Figure 57:Total Use of Digital Payments by Number of Types Used,2016-2020.190 Figure 58:Growth in US FinTech by

18、 Platform.190 Figure 59:Finance and FinTech Participation by Gender,2017.195 Figure 60:Proportion of Respondents Using FinTech During COVID-19.196 Figure 61:Evolution Over the Number of FinTech Companies by Sector.198 Figure 62:Investment Deals in Q1 2021 by Sector.198 Figure 63:MSME and Large Enter

19、prise Sector in Viet Nam.203 Figure 64:Viet Nams FinTech Sector in 2020.205 Figure 65:Gender Split and Usage of Financial Services.206 6 LIST OF TABLES Table 1:Data Collection Methodology by Type of Stakeholders.16 Table 2:List of Key Informant Interviews Held.17 Table 3:Map of Current Initiatives t

20、o Ease SMEs Access to FinTech.32 Table 4:Innovative Models to Improve Financial Technology.46 Table 5:Key Regulatory Actors in Australia.55 Table 6:Regulations Related to FinTech Services in Australia.56 Table 7:SME Overview.58 Table 8:Transaction Characteristics by Institution.60 Table 9:Loan Chara

21、cteristic by Institution.62 Table 10:Emerging FinTech Companies in Australia.66 Table 11:Key Regulators for FinTech Services in Canada.70 Table 12:Key FinTech Regulations in Canada.72 Table 13:Emerging FinTech Companies in Canada.78 Table 14:Key Regulatory Actors in Chile.85 Table 15:Regulations Rel

22、ated to FinTech Services in Chile.85 Table 16:Emerging FinTech Companies in Chile.92 Table 17:Key Regulatory Actors in Colombia.95 Table 18:Regulations Related to FinTech Services in Colombia.96 Table 19:Regulations Affecting the SME Sector and FinTech Services.99 Table 20:Emerging FinTech Companies

23、 in Colombia.101 Table 21:Key Regulators for FinTech Services in Hong Kong,China.105 Table 22:Key Regulations Related to FinTech in Hong Kong,China.106 Table 23:Emerging FinTech Companies in Hong Kong,China.110 Table 24:Key Regulatory Actors in Indonesia.114 Table 25:Regulations Related to FinTech s

24、ervices in Indonesia.115 Table 26:SME Overview in 2019.117 Table 27:Emerging FinTech Companies in Indonesia.121 Table 28:Key Regulators for FinTech Services in Kenya.124 Table 29:Regulations Related to FinTech Services in Kenya.125 Table 30:Emerging FinTech Companies in Kenya.131 Table 31:Key Regula

25、tors of FinTech Services in Malaysia.134 Table 32:Regulations Related to FinTech Services in Malaysia.135 Table 33:Emerging FinTech Companies in Malaysia.143 7 Table 34:Key Regulatory Actors in Mexico.147 Table 35:The Two Main Classifications Envisaged by the FinTech Law in Mexico.149 Table 36:Emerg

26、ing FinTech Companies in Mexico.153 Table 37:Key Regulatory Actors in The Philippines.156 Table 38:Regulations Related to FinTech Services in The Philippines.157 Table 39:Emerging FinTech Companies in The Philippines.162 Table 40:Key Regulators for FinTech Services in Singapore.167 Table 41:Key FinT

27、ech Regulations in Singapore.168 Table 42:Emerging FinTech Companies in Singapore.174 Table 43:Key Regulatory Actors in Thailand.178 Table 44:Regulations Related to FinTech Services in Thailand.179 Table 45:Firm Size Specification.181 Table 46:depas Different Programs for Digital Start-ups.185 Table

28、 47:Emerging FinTech Companies in Thailand.187 Table 48:Key Regulatory Actors in USA.191 Table 49:Emerging FinTech Companies in the USA.197 Table 50:Key Regulatory Actors in Viet Nam.201 Table 51:Regulations Related to FinTech Services in Viet Nam.202 Table 52:Emerging FinTech Companies in Viet Nam.

29、207 Table 53:Economies Level Analysis of Core FinTech Activities.211 8 ABBREVIATIONS ACL Australian Credit License ACOPI Colombian Association for Micro,Small and Medium Enterprises ACRA Corporate Regulatory Authority AFS Australian financial services AI Artificial Intelligence AML Anti-Money Launde

30、ring APEC Asia-Pacific Economic Cooperation API Application Programming Interface APRA Australian Prudential Regulation Authority ASEAN Association of Southeast Asian Nations ASFL Australian financial services license ASIC Australian Securities and Investment Commissions AUD Australian Dollars BI Ba

31、nk of Indonesia BOT The Bank of Thailand BSP Bangko Sentral ng Pilipinas CCCS Competition and Consumer Regulatory Authority of Singapore CDI Commercial Data Interchange CDR Consumer Data Right CFPB Consumer Financial Protection Bureau CMA Capital Markets Authority CMF The Financial Market Commission

32、 CMU Chiang Mai University CORFO Corporacin de Fomento de la Produccin CR Hong Kong,China Companies Registry 9 CSEF Crowd-Sourced Equity Funding CTE Espacio Controlado de Prueba depa Digital Economy Promotion Agency DLT Distributed Ledger Technology DTI Debt-to-Income Ratio e-KYC Electronic Know-You

33、r-Customer ECF Equity crowdfunding EFM Enterprise Financial Management FinTech Financial Technologies GDP Growth Domestic Product HKMA Hong Kong,China Monetary Authority IA Insurance Authority IC Insurance Commission ICT Information and Communications Technology IFC Collective Financing Institutions

34、 IFPE Electronic Payment Fund Institutions IRA Insurance Regulatory Authority KII Key Informant Interview MAS Monetary Authority of Singapore MCO Movement Control Order MDEC Malaysia Digital Economy Corporation MSME Micro,Small and Medium Enterprise OCC Office of the Comptroller of Currency OECD Org

35、anization for Economic Co-operation and Development OJK Financial Services Authority P2P Lending Peer-to-Peer Lending 10 POS Point of Sale PSE Secure Online Payment SC Securities Commission Malaysia SEC The Securities and Exchange Commission SFC Superintendencia Financiera de Colombia SFC Securities

36、 and Futures Commission SLIK Financial Information Services System SME Small Medium Enterprise UAF The Financial Analysis Unit UNSGSA United Nations Secretary-Generals Special Advocate for Inclusive Finance for Development USD United States dollars WEF World Economic Forum 11 1 EXECUTIVE SUMMARY The

37、 FinTech sector has been growing rapidly in many APEC Economies.For instance,in Chile,from 2016 to 2021,the number of FinTech enterprises grew by almost 220%.Digital financial services have especially grown in popularity as an area of focus for financial interventions over the last few years and exa

38、cerbated by the COVID-19 pandemic.FinTech penetration is highest in payment transaction technology,followed by money transfer,remittances,and lending.SMEs have been gradually adopting FinTech offerings,but there is still significant room for improvement.However,FinTech companies have,for the most pa

39、rt,been able to reduce transaction costs for SMEs.The objective of this APEC policy paper is to provide a state of play on the financial policy and programs enabling FinTech development and mapping them to the 14 economies(12 APEC members and 2 non-APEC members).The project aligns with the three key

40、 pillars of the APEC Action Agenda on Advancing Economic,Financial,and Social Inclusion:i)Economic Inclusion:focuses on capacity building to mitigate challenges of public policy facing FinTech industries,and how financial technologies can support SMEs and entrepreneurs;ii)Financial Inclusion:mapping

41、 of best practices of financial inclusion through FinTech,creating awareness and broader access to FinTech services,and iii)Social Inclusion:deliver recommendations to develop a new financial ecosystem composed of public agencies,FinTech companies,SMEs and women-led SMEs.To carry out the study,A2F C

42、onsulting conducted an extensive desk review of the FinTech landscape,business and regulatory environment,and the FinTech SME policy ecosystem for the selected APEC economies.In addition,key informant interviews with about 80 stakeholders were carried out.The stakeholders included government officia

43、ls,institutional stakeholders,business associations,traditional financial institutions,mobile network operators,and FinTech companies.FinTech is multisector and falls under the jurisdiction of various regulators and laws.FinTech covers many different sectors,from retail banking,commercial banking,in

44、vestment management,insurance,and more.Economies have been issuing different sets of regulations to cover the wide array of activities and innovations falling under the definition of FinTech.For instance,there are numerous laws that regulate the various activities of FinTech firms in Singapore.Finan

45、cial regulation in Singapore is function-based,not firm-based.As such,FinTech firms will fall under the jurisdiction of various existing laws based on the services they provide.In another example,Mexico has recently enacted the FinTech Law of 2018 to regulate the previously unchecked growth of digit

46、al banking,contactless digital payments,and real-time payments.The FinTech Law regulates Financial Technology Institutions(ITFs)to offer greater legal certainty to users of financial services through digital platforms.In addition,to facilitate coordination on regulatory aspects,some economies have o

47、pted to establish a What is a Fintech?Fintech,or financial technology,is the term used to describe any technology that delivers financial services through software,such as online banking,mobile payment apps or even cryptocurrency.Fintech is a broad category that encompasses many different technologi

48、es,but the primary objectives are to change the way consumers and businesses access their finances and compete with traditional financial services.12 single point of contact for all matters related to FinTech regulation.This reduces the communication barrier between the private sector and the regula

49、tor and makes the process of engagement with the private sector simpler and more efficient.Examples include the Ministry of Finance in Mexico and the Digital Economy Promotion Agency(depa),Thailand.Similarly,regulatory sandboxes have been used to test innovative products,albeit with mixed results.Sa

50、ndboxes are a safe space in which businesses can test innovative products,services,business models,and delivery mechanisms without immediately incurring all the normal regulatory consequences of engaging in the activity in question.This enables the FinTech companies to pilot a product or business mo

51、del and manage their regulatory risk during the testing period.For instance,the regulatory sandbox set up by Bank Negara Malaysia has been credited for much of the success of the recent growth in the Malaysian FinTech sector.One of the graduates of this sandbox,MoneyMatch has recently raised almost

52、USD 4.4 million in series A funding.However,some stakeholders have divided opinions about regulatory sandboxes effectiveness.For instance,some stakeholders argue that the sandboxes make the regulators the gatekeepers of FinTech innovation,which may slow down or even halt the innovation process.While

53、 others have pointed out that there have been very few success stories coming out of these sandboxes.The research shows that women generally trail men in the use of FinTech and financial inclusion,especially in developing economies.For example,in Malaysia,women were over 10 percent less likely to ha

54、ve made or received a digital payment within the last year.The case was similar in economies like Indonesia or Kenya.The analysis indicates that FinTech participation among women could be lower due to a lack of enthusiasm among women for new FinTech products,online security concerns,and lack of acce

55、ss to technology.The situation may have been exacerbated due to FinTech lacking a gendered focus.For instance,one stakeholder in the FinTech industry stated that they are focused on developing products and services to cater to the general consumers or SMEs,rather than developing products particularl

56、y tailored for women and women-owned SMEs.This problem could be partially stoked due to the lack of female entrepreneurs and the female workforce in the FinTech industry.There are less than 30 percent of women in FinTech,and less than 5 percent of them are CEOs.Therefore,decision-making women are la

57、rgely underrepresented in the FinTech industry.However,it should be noted that the trend appeared to be different in developed economies like Australia or Canada,where both men and women were highly involved in the financial services and FinTech sectors.However,the report also identified several pro

58、mising developments that are helping address such gender disparity in the FinTech sector.For instance,universal digital identification schemes have helped reduce frictions in womens access to finance.Women have particularly benefitted from advances in credit scoring methods using AI&ML.These credit

59、scoring methods are particularly useful in economies where there is a dearth of financial data,and these scores are objective and do not have gendered biases like traditional credit scoring models.In addition,FinTech innovation facilitators are playing an important role in promoting women-led or wom

60、en-focused FinTech firms.For instance,FinTech startups 13 like Musoni Microfinance in Kenya primarily provides loans to women smallholder farmers,while Manulifes Eve in The Philippines targeted the womens health insurance section.The paper also found that digital finance has made women vulnerable to

61、 new security related threats,which must be addressed.In addition,economy-level policies also play a vital role in encouraging female entrepreneurship by addressing issues related to womens economic empowerment like tackling adverse norms and promoting positive role models,ensuring legal protection

62、and reforming discriminatory laws,and so on.The analysis suggests that APEC policy makers could target several policy enablers that may assist in establishing a landscape that would help the FinTech sector expand in an inclusive manner.Digital identification of the customer base is key for FinTech d

63、evelopment.Economies that lack universal digital identity solutions,such as digital ID cards,appeared not to be suitable to foster the FinTech sector.In addition,open banking has immense potential to foster competition and innovation in the FinTech industry by reducing barriers to entry and helping

64、introduce tailored products for SMEs.For these reasons,open banking was favored by most policy makers.The paper also identified that to have a healthy FinTech environment the economies must have top data privacy,protection against financial fraud,along with ensuring cyber-security.Platforms promotin

65、g dialogue between FinTech regulators and FinTech companies have also facilitated innovation and regulation in the sector.These include the creation of innovation facilitators,such as FinTech hubs,SME digitalization programs,and entrepreneurship networking platforms.Several technology enablers were

66、also identified as impactful in terms of improving access to financial services for SMEs.Technologies like API and biometrics have supported the implementation of programs and policies to support FinTech development.Similarly,artificial intelligence/machine learning(AI&ML)and digital ledger technolo

67、gy(DLT)have enabled the expansion of alternative credit scoring methods and further refined data analysis capabilities.In addition,technology enablers like digital authentication systems,blockchain,and cryptoassets have helped push the frontier in terms of secure access to FinTech services.For insta

68、nce,iAM Smart provided all Hong Kong,China residents with a single digital identity and authentication to conduct transactions online,simplifying the process to get financial services.In another example,the Canadian firm Bitfury provided a premier blockchain as a service solution,which helped the Ca

69、nadian government and businesses integrate blockchain systems into their operations to increase time and cost efficiency.14 2 INTRODUCTION The APEC project aims to explore how policy makers,in particular public development agencies,can foster wider uptake of FinTech solutions.Data suggests that the

70、FinTech industry is growing at rapid rates,registering a global investment level that grew from approximately USD 1.1 billion in 2010 to USD 31 billion in 2017.1 This project aims to deliver recommendations for policy makers in APEC economies on how to increase awareness and foster the adoption of F

71、inTech solutions for SMEs.2 The project aligns with the three key pillars of the APEC Action Agenda on Advancing Economic,Financial and Social Inclusion:i)Economic Inclusion:Focus on capacity building to mitigate challenges of public policy facing FinTech industries,and how financial technologies ca

72、n support SMEs and entrepreneurs;ii)Financial Inclusion:Mapping of best practices of financial inclusion through FinTech,creating awareness and broader access to FinTech services and;iii)Social Inclusion:Deliver recommendations to develop a new financial ecosystem composed of public agencies,FinTech

73、 companies,SMEs and women-led SMEs.The objective of this policy paper is to provide a state of play on the financial policy and programs enabling FinTech development and mapping them to the 14 economies.FinTech has created new pathways to interact with financial service providers,and to reach unders

74、erved SME segments,such as those located far from large urban areas,and for women-owned enterprises in need of finance.This created a huge potential to diversify financing instruments,fostering greater competition in SME finance markets,assisting SMEs in accessing funding and technological services

75、that were once unavailable,while facilitating structural change in financial markets.The report presents key insights into the trends of FinTech development in the selected APEC member economies.This includes the understanding of the FinTechs in the market and the products and services they are curr

76、ently offering,along with the common practices or innovative and emerging approaches FinTech companies are utilizing to achieve financial inclusion.The report also presents the current regulatory framework for the FinTech industry by economy and mapping of current initiatives by development banks,de

77、velopment agencies,other government bodies,and to some extent,non-government actors,to ease SMEs access to FinTech providers.This policy paper presents the findings of the assessment carried on by A2F Consulting on 14 APEC economies,structured into 6 key sections.Following the introduction,Section 2

78、 illustrates the research methodology and summarizes the stakeholders comments collected during interviews held for each APEC economy.Section 3 illustrates the state of play regarding regulatory and support program approaches in APEC members.This section will help the reader get an understanding of

79、the economies regulatory environment,and FinTech adoption status,and provides an overview of the enabling policy,programs,and technologies 1 KPMG(2018).The Pulse of FinTech.2 OECD is currently in the process of producing an Update to the G20/OECD High-Level Principles on SME Financing,first develope

80、d in 2015,to take account of recent developments in the SME financing landscape.In this context they are developing a dedicated Principle on Fintech,which could be quite complementary to this paper.15 supporting FinTech development.Section 4 maps the current initiatives taken by the public,private a

81、nd international stakeholders to improve SMEs access to FinTech services provided by the enablers highlighted in Section 3.A comprehensive catalogue of initiatives is provided which is disaggregated by economy and type of enabler.Section 5 provides the state of womens inclusion in the FinTech indust

82、ry.This includes a preliminary assessment of the impact of the policy and technology enablers on gender inclusion in FinTech.Section 6 includes the detailed case studies of the FinTech ecosystem in each APEC economy.The analyses cover the FinTech regulatory framework,FinTech-based financial inclusio

83、n of SMEs,gender analysis,impact of Covid-19 pandemic on the FinTech,and illustration of the FinTech practices to achieve financial inclusion.Annex 1 presents a summary of APEC economies core FinTech activities and Annex 2 includes the questionnaires and stakeholder interview guides.16 3 APPROACH&ME

84、THODOLOGY A2F Consulting conducted a desk review of the existing FinTech landscape for fourteen selected APEC economies.The selected economies represent different world regions:7 economies were selected from the Asia region,1 from Africa,1 from Oceania,3 from North America,and 2 from South America.T

85、he economies were further stratified as APEC developed economies,APEC developing economies,Latin American developing economies,and African developing economies.The desk review consisted of available studies,third party reports,relevant policy documents,regulations,and other publicly available inform

86、ation on existing initiatives to enhance the FinTech landscape.The objective was to understand the current trends in FinTech development,the state of play regarding the regulatory framework and support programs for APEC members,and financial innovations related to SMEs.The desk review was complement

87、ed by key informant interviews with key stakeholders in each of the selected economies.A2F Consulting interviewed about 80 stakeholders,including government officials from different ministries,e.g.,Ministry of Finance in Chile,Canada;institutional stakeholders,e.g.,FinTech Colombia,FinteChile,Jewel

88、Digital Ventures(Malaysia);business associations,e.g.,The Philippines Chamber of Commerce,Federation of Independent Business,FinTech Association of Singapore the World Bank;traditional financial institutions,e.g.,Bank Association of the Philippines;mobile network operators,e.g.,Entel in Chile and Fi

89、nTech companies,e.g.,NIUM(Singapore),R3(USA)and Questrade(Canada).Valuable information was collected to understand the state of play of the FinTech landscape,including policy and regulation,consumer protection and SME sector initiatives,gaps,and challenges.Table 1:Data Collection Methodology by Type

90、 of Stakeholders Stakeholders Relevance Selection Criteria Approach of Engaging the Stakeholder Policymakers Responsible for passing financial legislation Responsible for the regulation and oversight of FinTech operations.Key financial policymaker/regulator(e.g.,central bank)Engaged via Semi-structu

91、red Interview Institutional Stakeholders Assist FinTech Startups to start their business Assist existing FinTechs to grow by facilitating connections with financiers and influencers Most important incubator,accelerator and startup hub Engaged via Semi-structured Interview 17 Business Associations Re

92、sponsible for lobbying for improvements in the SME sector Aware of the major challenges,financial and non-financial needs of SMEs Chamber of Commerce,Bankers Associations,Insurance Associations,SME Association or Trade Association for each economy Engaged via Semi-structured Interview FinTech Compan

93、ies Key element of the FinTech ecosystem.Selected FinTech companies listed in FinTech associations and/or present in FinTech rankings Engaged via online survey.Selected FinTech companies engaged via Semi-structured interview.Mobile Network Operators Enable FinTech companies to provide their services

94、 to SMEs Mobile Network Operators Engaged via Semi-structured Interview-Table 2:List of Key Informant Interviews Held Economy Type of Stakeholder Institution Name Australia Regulator Government of Australia-The Treasury Canada Regulator Department of Finance Canada Business Association Canadian Fede

95、ration of Independent Business FinTech Company Questrade Chile Regulator Ministry of Finance Regulator CORFO Business Association FinteChile Business Association Finnovista Institutional Stakeholder UDD Ventures Institutional Stakeholder Genesis Ventures Mobile Network Operator Entel FinTech Company

96、 Cumplo FinTech Company amiPASS FinTech Company Chita FinTech Company TOC Biometrics Colombia Regulator Ministry of Finance Regulator Financial Regulatory Unit Business Association Colombia FinTech Business Association Finnovista FinTech Company 4ToldFintech CO SAS FinTech Company MOVII SA 18 FinTec

97、h Company PayU Colombia Hong Kong,China FinTech Company RiskFlo FinTech Company NIUM Indonesia Regulator Bank Indonesia OJK FinTech Company NIUM FinTech Company OVO Business Association Indonesia Joint Funding FinTech Association Business Association FinTech Lending Companies Association FinTech Com

98、pany Funding Societies FinTech Company Ammana FinTech Company Duitku Kenya Institutional Stakeholder FSD Africa FinTech Company IPSL Malaysia Regulator Bank Negara Malaysia Regulator Malaysia Digital Economy Corporation Regulator Securities Commission Malaysia Business Association Jewel Digital Vent

99、ures Institutional Stakeholder Association of Development Finance Institutions of Malaysia FinTech Company Enidea Sdn Bhd FinTech Company Axiata Digital FinTech Company Blocklime technologies Sdn.Bhd.FinTech Company NIUM FinTech Company Funding Societies Mexico Regulator Ministry of Finance and Publ

100、ic Credit,Banking,Securities and Savings Unit Business Association Association of Crowdfunding Platforms Business Association Finnovista FinTech Company Finerio Connect FinTech Company Siembro Singapore Business Association Singapore FinTech Business Association The Association of Banks Singapore Fi

101、nTech Company NIUM FinTech Company Funding Societies FinTech Company Grab Thailand FinTech Company Funding Societies FinTech Company Appman The Philippines FinTech Company NIUM Business Association The Philippines Chamber FinTech Company OmniPay FinTech Company Ayannah FinTech Company CreditBPO 19 B

102、usiness Association Philippines Bankers Association Business Association Philippines FinTech Association United States Regulator Anonymous*FinTech Company PayPal FinTech Company R3 Viet Nam Business Association BK Holdings Business Association FinTech Club Viet Nam FinTech Company NIUM FinTech Compa

103、ny Funding Societies 20 4 STATE OF PLAY REGARDING REGULATORY AND SUPPORT PROGRAM APPROACHES 4.1 OVERVIEW OF THE REGULATORY ENVIRONMENT FinTech regulation falls under the jurisdiction of a diverse array of regulators and laws,depending on the type of service provided.FinTech itself covers many differ

104、ent sectors,from retail banking,commercial banking,investment management,insurance,and so on,which makes the regulation and oversight of FinTech difficult.Economies have been issuing different sets of regulations to cover the wide array of innovations that fall within their own definition of the ter

105、m FinTech.A prime example is the USA,where FinTech companies do not fall under regulations specific to the FinTech sector overall but are subject to regulations depending on the service they provide,the states in which they do business,and how they collect and use customer data.For instance,a compan

106、y providing robo-advising services to consumers may be subject to regulations by the Security and Exchange Commission(SEC)as a provider of investment services and by the Consumer Financial Protection Bureau(CFPB)as a provider of services to consumers.In most of the other economies studied,except Mex

107、ico,FinTech regulations fall under various categories like Person-to-Person(P2P)lending,crowdfunding,cryptocurrency,robo-advising,etc.and are covered by more than one law.Most economies do not have a singular law regulating the FinTech sector.Since developing regulations for FinTech enterprises in d

108、ifferent sectors can become quite complex,most economies do not have a singular law regulating the FinTech sector.However,Mexico has recently enacted a law specifically targeting the FinTech sector,3 and many economies have been trying to emulate it.However,an analysis of the 2018 Financial Technolo

109、gy Institutions Law reveals that Mexicos FinTech law mainly regulates two types of companies:(i)electronic payment institutions(or electronic money issuers)and crowdfunding institutions.It does not cover other institutions that also use FinTech to reach their customers,nor does it provide regulatory

110、 guidance and oversight to other FinTech technology providers.4 The experience from Mexico somewhat indicates that economies might need to be flexible regarding the creation of FinTech regulation,and a single law might not be enough or ideal to cover the whole FinTech sector.Some economies have opte

111、d to establish a single point of contact for all matters related to FinTech regulation,to increase regulatory efficiency.As FinTech enterprises could be categorized under several different industries,the private sector,including FinTech firms,often finds it difficult to navigate the system to reach

112、the right regulator for their issues or innovations.Some economies have already taken steps to ensure that this navigation process is streamlined,by designating a point of contact for FinTech regulation matters.For example,Mexico has designated the Ministry of Finance,and Thailand has the Digital Ec

113、onomy Promotion Agency(depa).Such a strategy eases the communication barrier 3 https:/www.cgap.org/blog/mexicos-FinTech-law-leading-new-trend-FinTech-regulation 4 Ibid.21 between the private sector and the regulator and makes the process of engagement with the private sector simpler and more efficie

114、nt.The designated authority is tasked with contacting the appropriate regulator and conveying the message.4.2 STATE OF FINTECH ADOPTION FinTech adoption appears to be mostly concentrated around the payment processes technology.In some of the Asian economies studied,namely Singapore and Hong Kong,Chi

115、na,digital payments are prevalent throughout the economy.For example,according to the EY Global FinTech Adoption Index 2019,the adoption rate of FinTech services jumped from 23 percent in 2017 to 67 percent in 2019 in Singapore.5 In Hong Kong,China,the recent launch of the consumer e-voucher program

116、 led to a major leap in the use of electronic payment systems,with 2.2 million new accounts created and up to 48,000 businesses accepting digital payments.In Colombia,the digital payments channel has the highest acceptance and growth in recent times in the economy.Transactions made through the PSE(S

117、ecure Online Payment)button grew 121 percent between January and July 2020.In the other economies studied,digital finance is largely present in the payment processing sector.The pandemic has been a catalyst in this regard,with businesses rushing to introduce touchless payments and new digital sales

118、channels such as online ordering,as customer mobility diminished.However,in some economies like Indonesia,digital payment options for both in-person and online transactions are still not widely available for merchants,and when the option exists,consumers have to pay an extra percentage for each tran

119、saction.FinTech adoption is also evident in sectors such as money transfer,remittance and lending,albeit less prevalent.For example,in Australia,consumers reported using FinTech services for money transfers and budgeting/financial planning.The situation is similar in other developed economies like t

120、he USA.Even in developing economies like Malaysia,surveyed individuals reported a wide range of FinTech usage,around 78 percent of respondents were interested in using digital banking for bill payments,69 percent for transferring money to family and friends,62 percent for payments at retail location

121、s,and 61 percent for managing deposits and withdrawals.The FinTech services in the lending sector have implemented machine learning techniques to automate loan making decisions.There were many other FinTech services especially for SMEs,like insurance,factoring,and invoice discounting,which were not

122、used much by the SMEs.The lack of usage could be ascribed to their lack of financial literacy in using these services.SMEs have been gradually adopting FinTech offerings,but there is still significant room for improvement.Like the typical“unbanked”,SMEs face similar challenges and risks in dealing w

123、ith the traditional financial institutions,such as banks.Therefore,FinTech companies have filled this gap and have been providing products and services to the unserved and underserved SMEs.Much like the individual consumers,SMEs have also mostly adopted FinTech for digital payment processing,and to

124、some extent for lending.For instance,in Viet 5 https:/ 22 Nam P2P lending platforms are attracting a great number of SME borrowers even at the pilot stage of the initiative.6 The P2P lending market in the economy has been growing substantially and is valued at around USD 7.8 billion(end of 2020).7 S

125、imilarly,in Indonesia,at least 54 percent of borrowers of P2P lending were MSMEs.The sector can help them scale up their business and qualify for bigger bank loans.FinTech companies have,for the most part,been able to reduce transaction costs for SMEs.For instance,the number of days it takes to open

126、 a bank account or get a loan decision has been reduced compared to traditional banking.Research from Yolt indicates that SME transaction costs can be reduced by up to USD 24,000 per month through FinTech8.In addition,another report found that SME expenses can be reduced by up to 7%from FinTech usag

127、e9.Finally,a study from the Wharton School of Business found that digitizing transfer payments significantly reduced travel and wait times,thereby raising the income of the rural Kenyan households using M-PESA by 5%-30%10.However,despite these efficiencies,adoption is yet to reach the same level rea

128、ched in electronic payments.Given the large existing SME financing gap,there is still potential for improvement in this sector.In addition,many of the FinTech services,like insurance and factoring,are not availed by the SMEs,mostly due to financial illiteracy.Furthermore,some small enterprises may f

129、ind the rates and fees of using FinTech services a deterrent.Many SMEs still offer discounts for cash-based transactions of their products,suggesting that cash is still their most preferred medium of transaction.4.3 POLICY AND PROGRAMS SUPPORTING FINTECH DEVELOPMENT 4.3.1 Digital Authentication Syst

130、ems Structures for digital consumer identification are essential to foster the FinTech sector development.Digital identification of the customer base is key for FinTech development.Economies which lack universal digital identity solutions,such as digital ID cards,are not suitable to foster the FinTe

131、ch sector.Earlier,financial services,especially lending,were primarily based on the personal knowledge of the client and manager.However,the increase in the volume of people seeking credit,and its availability,meant that this was no longer practical.The recent availability of data has fostered the e

132、mergence of alternative ways of offering financial services.However,the data can only be utilized to make financial marketing decisions if it can be uniquely traced back to individual customers.Customer identification is important because institutions need it to comply with regulations,assess risk f

133、or insurance and credit and provide a tailored customer experience.Digital identity promises to improve these while removing inefficiencies from processes that are largely manual today.Further,6 Fintech lending platforms to answer Viet Nams SME Funding Crunch.Unravel.(2020,October 8)Retrieved Novemb

134、er 1,2021,from https:/unravel.ink/FinTech-lending-platforms-to-answer-Viet Nams-sme-funding-crunch/.7 https:/kr- Namese-p2p-lending-firm 8 https:/ https:/ 10 https:/knowledge.wharton.upenn.edu/article/can-fintech-make-the-world-more-inclusive/23 digital authentication systems,both at the consumer an

135、d member economy level,helps combat cybercrimes and financial frauds,which is a rising concern.All the studied economies have identification systems,which can serve as the backbone of establishing robust digital authentication systems.4.3.2 Open Banking Open banking appears to be favored by policy m

136、akers.Open banking refers to the process of using Application Programming Interface(APIs)to open up consumers financial data to third parties.Open banking enables FinTechs with better decision-making,access to third-party capabilities,greater scale of data;helps regulators support innovation,competi

137、tion and system oversight;and provides customers better access to higher quality and more efficient products.The analysis of the economies,including the stakeholders interviews,suggest that open banking has immense potential to improve the economies financial inclusion landscape,especially in econom

138、ies with limited development in credit bureaus.Over the past decade,the concept of open banking has been popular across many policy makers and banking sector regulators in the economies studied and beyond,and its impact is being felt in the banking sector.Economies like Singapore have advanced open

139、banking regulations.The Monetary Association of Singapore(MAS)and Association of Banks in Singapore(ABS)have collaborated for democratizing banking data through public endpoints with regulatory guidelines.11 Many big banks in Singapore like DBS(previously known as The Development Bank of Singapore L

140、imited),HSBC,Standard Chartered and Citi,have already embarked on opening up their data to banking,API consumers and partners.Other developing economies in Southeast Asia like Malaysia and Thailand have also taken steps towards enhancing open banking.The analysis indicates that open banking has imme

141、nse potential to foster innovation and help introduce tailored products for SMEs.SMEs,especially in the developing economies,have limited information availability.Therefore,financial institutions are often unable to accurately assess an SMEs creditworthiness and price accordingly,or tailor products

142、and services.With open banking however,a lender may analyze an SME borrowers online sales and payments activity to assess the borrowers ability to repay a loan without a credit score or use utilities and telecommunications company data to confirm if a borrower has a history of paying bills on time.1

143、2 A lender can also use various other user data to corroborate basic elements of a loan application more quickly and cheaply,such as verifying a small business place of operation through geolocation data obtained from the entrepreneurs telecommunications company.13 In addition,increasing availabilit

144、y of data on SME borrowers could also be used in member economy-level credit databases that do not contain individual information.This might help achieve more precise estimates of SME default risk,potentially resulting in reductions in SME risk premiums.11 https:/ 12 Creehan,S.(2019).How digital inn

145、ovation can increase small business access to finance in Asia.Fintech for Asian SMEs,1.13 Ibid.24 However,data privacy and financial fraud are important concerns related to open banking.The digitalization that comes with open banking has also widened the threat landscape related to financial crime.T

146、here is an enhanced risk of identity theft and online fraud in the digital space.The concern is especially true due to malicious third-party applications which could access a customers account and result in data breaches,hacking and fraud.Research evidence shows that 48 percent of consumers had nega

147、tive opinions about open banking due to the data and cybersecurity concerns.14 If not managed correctly,these digital frauds can erode trust in the FinTech sector.The regulatory frameworks surrounding open banking could cover aspects like licensing of third parties;restrictions around screen scrapin

148、g practices;data privacy and disclosure/consent requirements;conditions with which third parties should comply for sharing and/or reselling data onward to“fourth parties”or using the data for purposes beyond the customers original consent;and expectations or requirements for data storage and securit

149、y.15 4.3.3 Data Protection Regulation and Cybersecurity Establishment of frameworks for data sharing and data protection is common throughout the economies.An inclusive and secure financial data sharing ecosystem is one in which financial institutions,data aggregators and third-party application pro

150、viders coordinate to provide data to consumers that are available,reliable,use-permissioned,secure and limited to application functionality.16 While such data protection systems have been in place for some time now,increasing digitalization have led to new enhanced regulations and technologies conce

151、rning the collection,use and protection of customer information.Almost all the economies studied have issued some form of data protection laws,the most common of which was the requirement to ask citizens for consent before data about them may be collected,used,or shared.Economies like Australia,Cana

152、da,Chile,Thailand,Singapore,or USA had more comprehensive frameworks which established more rights for individuals,like data portability,the right not to be profiled or the right to be forgotten and so on.Their data protection laws were alike the General Data Protection Regulation(GDPR)17 followed i

153、n the EU,which is an initial step towards transnational data protection laws.Singapores Personal Data Protection Act(PDPA)even requires all organizations to designate one or more individuals to be responsible for the organizations compliance with the PDPA.Among the developing economies,Kenyas Data P

154、rotection Act also follows the GDPR.Cybersecurity was also a top concern,and most economies have mitigation measures against cyber-attacks;however,there is a lack of robust economy member level cyber-security measure.Cyber-security is related to the overall data protection regulation but is more foc

155、used on stopping financial frauds like identity theft and loan stacking,as well as 14 https:/ 15 BCoB,S.(2019).Report on Open Banking and Application Programming Interfaces:BISBank for International Settlements.16 CFSI(2016).CFSIs Consumer Data Sharing Principles:A Framework for Industry-Wide Collab

156、oration 17 The General Data Protection Regulation(EU)2016/679(GDPR)is a regulation in EU law on data protection and privacy in the European Union(EU)and the European Economic Area(EEA).It also addresses the transfer of personal data outside the EU and EEA areas.25 financial crimes like money-launder

157、ing and tax-evasion,that are becoming common with rise in FinTech.18 For instance,in Kenya,a cybersecurity firms network of fraud sensors found that 51 percent of mobile-based transactions were identified as suspect.19 In 2018,an estimated 14.4 million people in the USA were victims of some sort of

158、identity fraud,according to Javelin Research.20 There are several steps that the economies have taken to mitigate the incidence of online financial fraud,however,completely diminishing such frauds could be very difficult to achieve.For example,in the US there are several institutions to which a cons

159、umer can complain if they are victim of online fraud.21 These systems help aggregate information and quickly identify the perpetuators.Consumer cyber-security is enhanced by programs,including awareness raising campaigns,which improve financial literacy.These campaigns help achieve the elementary le

160、vel of financial protection.4.3.4 Regulatory Sandboxes Regulatory sandbox is used in many economies to test innovative products.The UK Financial Conduct Authority(FCA)defines it as a safe space in which businesses can test innovative products,services,business models and delivery mechanisms without

161、immediately incurring all the normal regulatory consequences of engaging in the activity in question.”These testing grounds are especially relevant in the FinTech world,where there is a growing need to develop regulatory frameworks for emerging business models.22 The sandbox in essence allows the Fi

162、nTech companies to pilot a product or business model and help companies manage their regulatory risk during the testing period itself.Sandboxes are intended to bring the cost of innovation down,reduces barriers to entry,and allows regulators to collect important insights before deciding if further r

163、egulatory action is necessary.Regulatory sandbox has the potential to promote innovation in the FinTech sector and reduce entry barriers.Regulatory sandboxes could be particularly useful in economies where regulatory requirements are unclear and where they may be creating barriers to entry for new F

164、inTech firms.Sandboxes provide FinTech firms a better understanding of regulatory hurdles and help build consensus among different stakeholders.In addition,sandboxes provide a platform for forging partnerships,between the new entrants and existing FinTechs or financial institutions,through accelerat

165、or-type programs,23 which in theory removes entry barriers for the newcomers.Furthermore,sandboxes provide a platform for the firms to tinker with their products and services and pilot the launch of new products,which can further foster industry innovation.18 Identity theft is when fraudsters use st

166、olen identities to wipe out customers bank accounts or mobile wallet accounts while loan stacking is when fraudsters take multiple loans using stolen identities https:/www.theeastafrican.co.ke/tea/business/kenya-identity-fraud-financial-services-industry-3441762 19 http:/ 20 https:/ https:/www.usa.g

167、ov/online-safety 22 https:/ A business accelerator is a program that gives developing companies access to mentorship,investors and other support that help them become stable,self-sufficient businesses.26 However,stakeholders have divided opinions about regulatory sandboxes effectiveness.For instance

168、,some stakeholders argue that the sandboxes make the regulators the gatekeepers of FinTech innovation,which may slow down or even halt innovation process.While others have pointed out that there have been very few success stories coming out of these sandboxes.One stakeholder indicated that the sandb

169、oxes contain“quicksand”as few FinTech firms graduate from them and those that do are not among the more successful FinTech firms.Such perceptions may create a stigma towards participation in these sandboxes.And without fintech participation,the regulatory sandboxes,which are expensive to setup and o

170、perate,may not result in any effective outcomes.There are pitfalls to following the trend of establishing a regulatory sandbox without assessing the economy context.Launching and running a sandbox is a complex and sophisticated process.It requires a lot of learning and consumes significant human and

171、 financial resources.Regulatory sandboxes are expensive too and may cost over USD 1million to operate.24 Moreover,evidence from CGAP studies have shown that sandbox-driven regulatory change is minimal and that most sandbox-tested innovations do not target excluded and underserved customers at the ba

172、se of the pyramid.25 Therefore,policy makers should look into alternatives before enacting regulatory sandboxes.There is a greater need to establish thought leadership by promoting policies that will have a broad impact on the entire FinTech ecosystem.Such policies include facilitating consumer-perm

173、issioned data access,adopting machine learning and alternative data in credit underwriting,and so on.26 Innovation-friendly policies can enhance the impact of sandboxes if it is established.4.3.5 Innovation Facilitators Policy makers have promoted FinTech innovation hubs,which are initiatives aimed

174、at generating business between startups and large companies.Regulators in many economies have begun setting up dedicated FinTech innovation units within their respective entities to take on FinTech developments with a more focused team.27 These units are staffed with experts who have deep understand

175、ing of FinTech business and service models and the underlying technologies,as well as a of local and international regulatory and supervisory frameworks.The units are often responsible for acting as liaison between financial service providers and relevant departments within the regulatory entity run

176、ning regulatory sandboxes and innovation hubs;analyzing new innovations and activities that fall outside existing regulatory scopes;and implementing programs and policy measures to encourage FinTech innovation.28 Evidence suggests that many more FinTechs have been supported by innovation hubs than s

177、andboxes and accelerators combined.29 24 https:/www.cgap.org/blog/running-sandbox-may-cost-over-1m-survey-shows 25 Less than 25 percent of sandbox tests focus on business models or technologies that explicitly address financial inclusion barriers or aim to address the financial needs of poor people

178、26 https:/pacscenter.stanford.edu/a-few-thoughts-on-regulatory-sandboxes/27 https:/www.afi-global.org/wp-content/uploads/2020/07/AFI_FinTech_SR_ISBN_digital.pdf 28 Ibid.29 https:/blogs.worldbank.org/psd/four-years-and-counting-what-weve-learned-regulatory-sandboxes 27 Platforms promoting dialogue be

179、tween FinTech regulators and FinTech companies have also facilitated innovation and regulation in the sector.The information gathered helps regulators receive market insight,so that they are able to make more informed policy decisions,while the FinTech companies get regulatory guidance30 and are abl

180、e to make more informed product decisions.Among the economies analyzed,there are quite a few examples of initiatives that promoted dialogue between regulators and innovators in the FinTech sector.For instance,the Consumer Financial Protection Bureau(CFPB)in the USA holds Office Hours,which involve o

181、ne-on-one meetings with representatives from the CFPB to discuss financial technology,new products or services,partnering with a bank or FinTech company.In Thailand,the Digital Economy Promotion Agency(depa)also has a similar platform for sharing ideas,which has seen some success.Furthermore,FinTech

182、 festivals have promoted FinTech technologies among the practitioners.One such example is the Singapore FinTech Festival,the largest of its kind in the world,which promotes a knowledge platform for the global FinTech community.FinTech companies from all over the world gather here to showcase and sha

183、re the newest development in fields like API,Big Data,Blockchain,Machine Learning,RegTech and Tech Risk.4.3.6 Gender Disaggregated Big Data Big data and data analytics open many opportunities for gender inclusion in FinTech and financial services in general.There are several ways through which big d

184、ata can help mitigate 30 Guidance is supplemental material published by an agency that helps clarify existing rules.These include interagency statements,advisories,bulletins,policy statements,questions and answers and frequently asked questions.Box 1:FinTech Innovation Hubs in Malaysia,Thailand,and

185、Singapore The Malaysian Digital Economy Corporation(MDEC)has developed the Fintech Booster program,a capacity building platform created in collaboration with Bank Negara Malaysia(BNM)as an offshoot of a survey conducted by BNM from their sandbox program to address the pain points of Fintech companie

186、s.The platform provides resources for both local and foreign companies that are based in Malaysia or looking to set up business in Malaysia through Legal&Compliance,Business Model,and Technology support.The Bank of Thailand(BOT)has set up multiple cross-functional“squad”teams comprised of representa

187、tives from various departments who respond to new FinTech technologies by sharing different perspectives based on their expertise and learning from one another.Together,they analyze how the new product or technology will impact consumer behavior,the banking landscape,monetary policy,foreign exchange

188、 controls,and other areas.One squad team currently in place is studying the potential issuance of central bank digital currencies.In 2015,the Monetary Authority of Singapore(MAS)established a dedicated FinTech and Innovation Group(FTIG)responsible for regulatory policies and developing strategies fo

189、r technology and innovation,to better manage risks,enhance efficiency and strengthen competitiveness in the financial 28 the gender gap in access to finance.First,big data can be analyzed for insights that improve decisions and give strategic confidence in business models that can help improve gende

190、r parity.Analysis of these data can provide valuable insights into patterns,trends,and discrepancies in access to finances from a gender perspective.Data analytics can also help predicting the demand for financial products among women,for example by analyzing social media posts.This can help the Fin

191、Tech firms design and offer products accordingly.In addition,the implicit gender bias against women can be mitigated via the use of data analytics to achieve objective financial marketing decision making.For instance,loan making decisions can be made on characteristics that determine repay ability r

192、ather than gender.Further,gender-disaggregated data allows the policy makers to design equitable policies and measure the gender impact of such policies.4.4 TECHNOLOGIES SUPPORTING FINTECH DEVELOPMENT Technologies like API and biometrics have supported the implementation of programs and policies to

193、support FinTech development.APIs are the main enabler for open banking programs and have mainly been used to facilitate access to customers payments and account information for non-bank firms in a regulated and secure way.An open banking API enables financial institutions to share financial data wit

194、h one another,typically through a third party-Box 2:Examples of programs using Big Data to achieve gender equity While these programs are not necessarily FinTech related,they provide a window to how big data can bring gender equity in the FinTech sector.Big data for financial inclusion and poverty m

195、apping World Bank DRC,Cote dIvoire,Ghana,Uganda,Zambia CDR&FTD Using call detail records(CDR)and financial transaction data(FTD)from network operators and financial institutions,the project aims to identify lists of individuals,especially women,who are likely to be interested in financial services f

196、rom IFC.The IFC will then use this information to develop products and marketing plans that appeal to potential clients,to ultimately increase the use of financial services by those who were previously unbanked.The project also aims to use household surveys together with big data to assess how finan

197、cial services affect household expenditure,and to produce poverty maps.Sex disaggregation of social media posts UN Global Pulse,Data2X and the University of Leiden Global Twitter Tweets This prototype tool infers the sex of users.The sex-disaggregation tool automates the process of looking up public

198、 information from Twitter profiles by analyzing users names from a built-in database of predefined names(from sources such as official statistics)that contain gender information.Advancement in the tool could help disaggregate data when gender-disaggregated data is not available.Identifying trends in

199、 discrimination against women in the workplace UN Global Pulse,ILO,Govt.of Indonesia Indonesia Tweets&Social Media Posts Public tweets(over 100,000 tweets over three years)were filtered using keywords related to discrimination,revealing four topics with a considerable volume of discussion:i)discrimi

200、nation in job requirements;ii)permission for women to work;iii)perceptions on appropriateness of different types of 29 developed application.Third party-developed applications are created by emerging FinTech companies and collaborators looking to make the digital banking industry inclusive.31 For ex

201、ample,the formulation of the Open API Framework is one of the seven initiatives taken by the Hong Kong,China Monetary Authority(HKMA)to help Hong Kong,China achieve a secure,controlled and convenient operating environment to allow banks and third-party service providers(TSPs)to work together and dev

202、elop innovative/integrated banking services.32 On the other hand biometric technologies like fingerprint scanning have contributed to more robust authentication systems and enabled a broader adoption of digital banking in most of the economies.Similarly,technologies like artificial intelligence and

203、machine learning(AI&ML)and digital ledger technology(DLT),have helped FinTechs achieve full potential of the available data.AI&ML is used for a wide-range of activities like process optimization,robo-advising,cyber-security and customer service.But one of the major uses of AI&ML is in credit scoring

204、,which enables FinTechs to use data and automation to make credit risk and marketing decisions objectively and more efficiently.For example,the Harvard Business Review reported that by using AI,one lender discovered that,historically,women would need to earn 30 percent more than men on average for e

205、quivalent-sized loans to be approved.33 This technology has also helped reduce the decision-making time to mere seconds,which before took months,therefore making financial decision making very fast and enabling more people to seek financing.On the other hand,DLTs like blockchain have enabled more se

206、amless and efficient FinTech services,from cost reductions to minimizing bureaucracy in traditional banking,which benefits both the FinTechs and the clients.It has also helped increase transparency in financial markets and assist in managing data breach and other fraudulent operations to enable FinT

207、ech businesses to share and transfer safe and unaltered data through a decentralized network.34 Figure 1:Technology Enablers support the implementation policies for FinTech development 31 https:/ 32 HKMA(2018).Open API Framework for the Hong Kong,China Banking Sector.33 https:/hbr.org/2020/11/ai-can

208、-make-bank-loans-more-fair 34 https:/nix- 5 MAP OF CURRENT INITIATIVES TO EASE SMES ACCESS TO FINTECH 5.1 OVERVIEW This section provides insights into initiatives that are helping to improve SMEs access to financial services in APEC economies and boost their long-term economic growth.The SMEs were a

209、 key contributor to the studied economies as an important source of jobs,growth,and innovation.Despite their essential role,SMEs receive a disproportionately small share of credit from the financial system,a trend that persists across developed and developing economies.This gap has led public instit

210、utions such as regulators and private entities to focus their efforts in mitigating the finance gap.The observed trend of current initiatives suggests that the primary focus is on establishing a landscape that would help the FinTech sector expand in an inclusive manner and increase competition in th

211、e sector.This will eventually lead to the development of a myriad of FinTech products and services,especially for the SMEs,women-owned SMEs and traditionally underserved groups,thus allowing them to reach more SMEs that for one reason or another were not served by traditional banking.The initiatives

212、 that were identified could be broadly categorized as:i)Policy enablers,which includes open banking,regulatory sandbox,innovation facilitators,digital authentication,big data facilities and data protection;ii)Enabling technologies,which includes AI&ML,DLTs,e-money,crypto assets and so on.In the case

213、 of open banking,it is noticeable that efforts have increased the adoption of new initiatives within APEC economies.For example,in Australia the Review on Open Banking initiative enables customers to have greater access and control over the data their banks hold on them.Similarly,the Smart Banking i

214、nitiatives in Hong Kong,China aim to help the banking sector to embrace the enormous opportunities brought about by the convergence of banking and technology,thereby improving the quality of banking products and services for customers and SMEs.Another example is the Open Banking Framework implemente

215、d in Mexico,which promotes greater protection of consumer data and fosters competition;and not only applies to the major banks but also to all financial institutions and all financial transactions,making it more encompassing.Most of the economies have either established a regulatory sandbox or conte

216、mplating its establishment.Some initiatives include the Australian Securities and Investment Commissions(ASIC)Regulatory Sandbox,the recently implemented Chilean Regulatory Sandbox,the Control Trial Environment(Espacio Controlado de Prueba)in Colombia,as well as the ones implemented in Singapore,Ind

217、onesia,and Malaysia.The primary reason for the establishment has been to provide a flexible regulatory framework for the FinTech companies to test the viability of innovative financial services.The expectation is that this piloting will increase the range of products and services offered by FinTechs

218、 and will target underserved groups like the SMEs.The creation of several innovation facilitators,such as FinTech hubs,SME digitalization programs,entrepreneurship networking platforms,was also observed.Some of these initiatives include the innovative finance and crowd-sourced equity funding by the

219、Australian 31 Government,or the Canada Digital Adoption Program initiative,a program aimed at providing businesses with financing,tools,and resources needed to adopt e-commerce platforms and digitization plans.In the developing economies,programs like Tech Tycoon+in Thailand provided network develop

220、ment opportunities for digital startups and technology entrepreneurs that are ready to grow in both domestic and international markets.On the other hand,some initiatives like the Digital Village in Indonesia aims to promote digital technology in the rural financial ecosystem,such as the digitalizati

221、on of village payment transactions,village fund distribution&utilization and promotion of local non-cash movement through digital financial services.In addition,some development agencies like the Inter-American Development Bank(IDB)have financed initiatives that promote private sector transition to

222、digital financial services.Digital payments have grown in popularity as an area of focus for financial interventions over the last few years and exacerbated by the COVID-19 pandemic.This is why the public and private sectors have been strongly promoting initiatives to encourage the use of contactles

223、s digital means for SMEs,both in the collection of their invoices and in the payment of their suppliers.Some examples of these include the bank Fintech partnership on Mobile POS in Canada,the Bill to regulate the interchange rates(“swipe fees”)for the payments system in Chile,the Indonesian Digital

224、Payments Regulatory Framework,or the eFactor Network in Mexico.In addition,technology enablers like digital authentication,blockchain and cryptoassests helped promulgate FinTech services.For instance,iAM Smart provided all Hong Kong,China residents with a single digital identity and authentication t

225、o conduct transactions online.Users can make use of the biometrics in their personal mobile device to authenticate their identities,which is verified against their Hong Kong,China ID cards during the iAM Smart registration process.Hyphen Group helped consumers across Hong Kong,China,Viet Nam,Malaysi

226、a,Chinese Taipei,Thailand,Singapore,the Philippines,and Indonesia save time and money by offering a free and easy online market comparison of banking and insurance products.Both consumers and service providers were benefited from the lower cost of acquisitions,higher conversion rates and unlimited r

227、each to consumers through the internet.The Canadian firm Bitfury provided a premier blockchain as a service solution,which helped the Canadian government and businesses integrate blockchain systems into their operations to increase time and cost efficiency.Our assessment suggests that there is a dea

228、rth of gender-focused initiatives among the studied economies.Nonetheless,some initiatives were identified to have a gender-focus,primarily focused on promoting and increasing the use of digital financial services and FinTech services by women,whether they are individuals or SME owners/managers.For

229、instance,the Sandbox Challenge in Mexico evaluated FinTechs from a gender impact perspective through a entrepreneurship competition,and it included a special prize category for startups either founded or led by women,and/or with business models focusing on financial products targeted towards women.I

230、n Kenya,Pezesha,started by a female FinTech entrepreneur,provides a digital platform where micro,small and medium-sized enterprises(MSMEs)can 32 tap into finance after being matched with investors seeking to foster productivity and growth among small businesses.Pezeshas customer base is 80percent yo

231、uth and 60percent women.35 5.2 MAP OF CURRENT INITIATIVES Table 3:Map of Current Initiatives to Ease SMEs Access to FinTech Economy Type of Enabler Policy/Technology Enabler Initiative to Ease SMEs Access to FinTech Australia Public Open Banking Review into Open Banking in Australia On 9 May 2018,th

232、e Government agreed to all the recommendations of the Review into Open Banking in Australia(Farrell Review).Open Banking will give customers greater access to and control over the data their banks hold on them.It creates a secure environment,where customers can direct that they,or trusted and accred

233、ited third parties chosen by them,be provided with their banking data.The government outlined a phased implementation timetable starting on July 2019 to July 2020.Australia Public Regulatory Sandbox Australian Securities and Investment Commissions(ASIC)Regulatory Sandbox On 15 December 2016,ASIC int

234、roduced industry wide licensing exemptions to allow eligible FinTech businesses to test certain specified services for up to 12 months without an Australian financial services or credit license.Eligible companies need only send ASIC written notice of their intention to test under the exemption.The r

235、egulatory sandbox provides a flexible regulatory framework,which makes it easier for FinTech companies to test the viability of innovative financial services,increasing the potential for new finance options.On 9 May 2017,the Government announced an enhanced regulatory sandbox.Legislation for an enha

236、nced regulatory sandbox will shortly be introduced to the Parliament,which will allow more businesses to test a wider range of new financial products over a longer period,further facilitating innovative new finance.The commencement date was announced as September 1st,2020.35 https:/www.afi-global.or

237、g/newsroom/blogs/pezesha-hopes-fintech-showcase-win-inspires-young-women-in-africa/33 Australia Public Innovation Facilitators Innovative finance and crowd-sourced equity funding The Government has introduced a CSEF framework for public companies,which commenced on 29 September 2017 and provides a n

238、ew funding avenue for early-stage businesses,whilst still providing a level of investor protection.The Government has extended the CSEF regime to enable more closely held proprietary companies to raise funds through CSEF,with accompanying modifications to increase accountability and investor protect

239、ion.Canada Public Innovation Facilitators Canada Digital Adoption Program initiative The federal government recently introduced the Canada Digital Adoption Program initiative,a CAD 4 billion program aimed at providing businesses with financing,tools,and resources needed to adopt e-commerce platforms

240、 and digitization plans.Canada Public Data Protection Regulation and Cybersecurity CyberSecure Canada The federal government has also introduced the CyberSecure Canada program,a certification program that aims to raise the cyber security baseline among Canadian small and medium-sized enterprises.The

241、 goal is to increase consumer confidence in the digital economy and better position SMEs to compete globally.Canada Public/Private Digital Payments Mobile POS National Bank of Canada partnered with Mobeewave,a Canadian FinTech,to provide mobile POS contactless solutions for SMEs through an app,witho

242、ut any additional attachments.Canada Public Digital Payments Retail Payments Activities Act Grants Fintechs greater access to national payment infrastructure,to be supervised by the Bank of Canada Canada Private Digital Banking SmartBanking for Business Canadian Imperial Bank of Commerce(CIBC)has la

243、unched its SmartBanking for Business service in collaboration with FinTech firms Xero,Ceridian,and Intuit.An online service platform to connect several financial services for SMEs in Canada.34 Canada Private Crypto assets/AI Bitfury FinTech company providing core AI products and integrated AI comput

244、ing systems,as well as full-service AI/blockchain enterprise solutions for corporations and governments.Bitfury also provides a premier blockchain-as-a-service solution,designed to help governments and companies integrate blockchain into their operations.Chile Public Innovation Facilitators Digitali

245、za tu Pyme A program of the Ministry of Economy along with CORFO,that seeks to create awareness,deliver training and foster the adoption of tools such as e-commerce(Pymes en Lnea),social media,delivery and logistics,digital tax matters(Despega Mipe)and business management.The aim is to digitalize 25

246、0 thousand SMEs by 2022.Chile Public Innovation Facilitators Innova Fosis Has the objective to increase sales of entrepreneurs from vulnerable backgrounds through the adoption of digital technologies.It invites civil society(private legal entities,whether for profit or not-for-profit),academia(publi

247、c or private universities and institutes of higher education)and the private sector to present innovative solutions that generate novel responses to a changing and complex reality.Chile Public Innovation Facilitators Fortalece Pyme Programme launched by CORFO in 2020,seeking to support the installat

248、ion and operation of centers to help SMEs improve their levels of productivity through the provision of services aimed at the adoption and use of digital technologies.Chile Public Innovation Facilitators FinTech Bill During 2020 Chile announced that it is working on a FinTech bill with the aim of pr

249、oviding the same opportunities for those companies that provide financial services with a more intensive use of technology than traditional companies,and thus reduce the regulatory gap among them.The bill has the potential to promote competition in the financial markets and financial inclusion.35 Ch

250、ile Public Innovation Facilitators Bill to regulate the interchange rates(“swipe fees”)for the payments system The project establishes:the interchange rates for local transactions with payment cards will be subject to maximum rates,differentiated by card type(credit,debit,or prepaid);the Central Ban

251、k will determine the maximum interchange rates by card type;the levels and structure of the maximum interchange rates will be established through an economic study carried out by an independent technical entity with proven international experience.Chile Public Innovation Facilitators Start-Up Chile

252、A public business accelerator program created for high-potential entrepreneurs to bootstrap their startups using Chile as a platform to go global.The programs objective is to generate a socio-economic impact through the acceleration of innovative technology firms that allow the sophistication and di

253、versification of Chiles economic matrix.Chile Public Innovation Facilitators SME Credit Programme In 2017,CORFO launched the SME Credit Programme to improve SME access to alternative sources of finance and non-bank financial intermediaries.Colombia Development Bank Innovation Facilitators IDB Invest

254、/Alpha Capital IDB Invest,a member of the IDB Group,provided a loan to AlphaCapital S.A.S.(AlphaCredit)for an amount in Colombian pesos equivalent to USD 40 million.The resources will support the expansion of AlphaCredits lending portfolio targeting retirees and pensioners,independent workers,and mi

255、cro,small and medium-sized enterprises(MSME)through digital platforms.The portfolio also includes loans guaranteed by the Government of Colombia to mitigate the economic impact of the COVID-19 health crisis.Colombia Public/Private Innovation Facilitators The Ministry of Commerce,Industry and Tourism

256、,and iNNpulsa Colombia Make available two preferential credit lines,with the objective of allowing the flow of money to entrepreneurs to mitigate some of the economic effects of COVID-19 in the economy,thanks to the alliance with Bancldex,the National Guarantee Fund(FNG),Banco Agrario,different Colo

257、mbian FinTech and other entities of the sector.36 Hong Kong,China Public Innovation Facilitators FinTech Facilitation Office(FFO)Established by the HKMA in 2016,facilitates the healthy development of the FinTech ecosystem in Hong Kong,China and promotes Hong Kong,China as a FinTech hub in Asia.Among

258、 other things,the FFO acts as a platform for exchanging ideas of innovative FinTech initiatives among key stakeholders and conducting outreaching activities;an interface between market participants and regulators within the HKMA to help improve the industrys understanding about the parts of the regu

259、latory landscape which are relevant to them;an initiator of industry research in potential application and risks of FinTech solutions;and a facilitator to nurture talents to meet the growing needs of the FinTech industry in Hong Kong,China.Hong Kong,China Public Digital Banking Smart Banking initiat

260、ives The initiatives aim to help the banking sector to rise to a higher level and embrace the enormous opportunities brought about by the convergence of banking and technology,thereby improving the quality of banking products and services for customers and SMEs.Hong Kong,China Public Innovation Faci

261、litators FinTech 2025 Aims to encourage the financial sector to adopt technology comprehensively by 2025,as well as to promote the provision of fair and efficient financial services for the benefit of Hong Kong,China citizens and the economy.Hong Kong,China Public Digital ID iAM Smart Provides all H

262、ong Kong,China residents with a single digital identity and authentication to conduct government and transactions online.Users can make use of the biometrics in their personal mobile device to authenticate their identities,which will have been verified against their Hong Kong,China ID cards during t

263、he iAM Smart registration process.Hong Kong,China Private Balance Sheet Lending Welend WeLend is the largest purely online lending platform in Hong Kong,China,combining technology and A.I.solutions.WeLend leverages on A.I.and big data analytics to provide an innovative online lending experience.37 H

264、ong Kong,China Private InsurTech/Robo-advisor Hyphen Group(founded as CompareAsiaGroup)Hyphen Group is a comparison platform in Asia,committed to finding consumers the right financial products,helping save time and money.The company helps consumers save time and money by offering a free and easy onl

265、ine market comparison of banking and insurance products,as well as broadband and mobile plans etc.Providers benefit from lower cost of acquisitions,higher conversion rates and unlimited reach to consumers through the internet.Under the Hyphen Group umbrella are several brands each localized for thei

266、r respective markets:MoneyHero in Hong Kong,China and Viet Nam,CompareHero in Malaysia,Money101 in Chinese Taipei,MoneyGuru in Thailand,SingSaver in Singapore,MoneyMax in the Philippines,and HaloMoney in Indonesia.Indonesia Private SME Lending Peer-to-peer lending platform Modalku,a local peer-to-pe

267、er lending platform,offers individual investors to chance to provide funding to chosen MSMEs with a deposit as low as Rp 10 million.Indonesia Public Innovation Facilitators Digital Finance Innovation Road Map and Action Plan 2020-2024 This road map launched by Indonesias Financial Services Authority

268、(OJK),complements a“regulatory sandbox”operated by OJK,in which FinTech startups can conduct live experiments to trial new products or business models in a controlled environment.It also allows OJK to receive immediate feedback and test upcoming regulations.With a more diverse range of loan products

269、,SMEs stand to benefit by finding products best suited to their business.Indonesia Public Innovation Facilitators E-smart IKM The Small and Medium Industries and Miscellaneous(IKMA)of the Ministry of Industry,launched the E-Smart IKM program to capture online transaction opportunities,as part of the

270、 Gernas BBI,a local movement as a way of supporting domestic industries/products.Indonesia Public Innovation Facilitators Gernas BBI Programme Member economy-level program as a way to support local industries/products.The governments intensive Gernas BBI campaign also aims to increase MSME/IKM onboa

271、rding on digital platforms,with a target of 30 million MSME/IKM onboarding by 2023.38 Indonesia Public e-Money Local Government Digital Wallet(TangselPayand OsingPay)Local governments white label digital wallet solutions aimed digitizing payments.It aims to increase total value of cashless transacti

272、ons,reduce corruption and promotes efficiency in the local government financing system.The initiative is supported by Ministry of Home Affairs and e-wallet providers such as Paytrenand Linkaja.Indonesia Public/Private Innovation Facilitators Digital Village The digital village initiative aims to pro

273、mote Internet of Things,wireless network,e-commerce system to promote efficiency in the public service delivery.One of the objectives of digital village is also to digitalize village payment transactions,village fund distribution&utilization and to promote economy-level non-cash movement through dig

274、ital financial services.The program to promote digital financial services in village administration and Village Owned Enterprises(BUMDES)is supported by Bank of Indonesia and several e-commerce companies such as Tokopedia.Kenya Public/Private Digital Payments Kopo Kopo A FinTech that offers digital

275、payment access to merchants in Kenya through M-PESA,applies Big Data analytics to merchant payment transaction data to offer SMEs a range of value-added services,such as unsecured,short-term loans.Kenya Private Innovation Facilitators Pezesha Translated as“financial empowerment”from Kenyan Swahili,p

276、rovides a digital platform where micro,small and medium-sized enterprises(MSMEs)can tap into finance after being matched with investors including banks,microfinance institutions and other retail lenders seeking to foster productivity and growth among small businesses.Kenya Private Robo-Advisors Arif

277、u Smart personal learning assistant and content marketplace that offers advice and financial skills training to vulnerable groups,including farmers,youth,women and MSMEs,through mobile phones.Users of both smart and feature phone can learn via SMS,WhatsApp and Facebook Messenger to develop new skill

278、s,discover products and services and earn rewards.39 Malaysia Public Regulatory Sandbox Regulatory Sandbox BNMs regulatory enhancement initiative to facilitate the development and adoption of FinTech solutions by introducing a regulatory sandbox framework in 2016 laid the groundwork for digital bank

279、ing.It gave FinTech companies regulatory flexibility to experiment with technology-driven customer solutions.The sandbox acted as a catalyst for technological innovations in financial services that will contribute to the growth and development of Malaysias financial sector.Participation in the sandb

280、ox initiative has helped FinTechs to raise capital.Malaysia Public Innovation Facilitators Financial Technology Enabler Group In 2016,BNM established a Financial Technology Enabler Group to formulate and enhance regulatory policies that facilitate Malaysias adoption of financial technology.Malaysia

281、Public Innovation Facilitators Alliance of Fintech Community The SC launched the“Alliance of FinTech Community”(aFINity)in 2015 to catalyze and nurture Fintech development in the Malaysian capital market.It serves as a platform for continuous interactions between the SC as a capital market regulator

282、 and all relevant Fintech stakeholders such as innovators,financial institutions,government agencies,ecosystem players,and investors.Among others,aFINity is aimed at understanding the needs of the fintech community and to provide regulatory guidance and policy steering to promote responsible innovat

283、ion.36 Malaysia Public MSME financing Equity Crowdfunding(ECF)and Peer-to-peer(P2P)Financing SC introduced the ECF and P2P financing frameworks in 2015 and 2016 respectively to allow for alternative market-based financing avenues for MSMEs to raise funds.ECF has helped to address financing gaps in e

284、arly-stage capital while P2P financing supported MSMEs to raise the required working capital or capital for growth.36 https:/.my/development/digital/embracing-innovations 40 Mexico Public/Private Innovation Facilitators Sandbox Challenge Mexico Regarding joint public and private initiatives to promo

285、te female financial inclusion,in 2020 the CNBV,with the joint participation of the United Kingdom Embassy,the Prosperity Fund,Distrito Emprendedor,Hogan Lovells and other law and consultancy firms,organized and sponsored the first Sandbox Challenge in Mexico.This is a regulatory competitive process

286、to promote innovation in the FinTech environment.During the Sandbox Challenge,FinTech startups were evaluated from a gender perspective and the competitive process included a special price category for those startups whose business models were focused on financial products targeted to women or that

287、were founded or led by women.This was a first,both for the Sandbox and women.Mexico Public Open Banking Open Banking Framework Mexicos open banking regulation promotes greater protection of consumer data and fosters competition and not only applies to the major banks but also to all financial instit

288、utions and all financial transactions,making it more encompassing.In addition,Mexicos open banking framework makes the introduction of open APIs mandatory.Mexico Public Regulatory Sandbox Regulatory Sandbox The FinTech Provisions contemplate“Innovative Models”(Modelos Novedosos),also known as a regu

289、latory sandbox,which implies the possibility for the authority to issue temporary authorizations to operate innovative services(the use of tools or technology different to those available at the time of the request for authorization)in a controlled and less costly environment.This space allows compa

290、nies to offer financial services to a limited number of customers,using innovative technological tools or the means to test them,before offering them to the public on a massive scale.41 Mexico Private Factoring eFactor Network A Mexico-based platform that enables electronic factoring services for SM

291、Es that wish to sell their accounts receivable.The e-Factor Network platform allows large buyers,suppliers,and financial institutions(banking and non-banking),to optimize working capital needs online by means of efficiently capturing electronic discounts in real-time.The most important value proposi

292、tion that eFactor Network has provided its SME clients is allowing them to operate on a single,multi-region,multi-currency,multi-institution solution.eFactor Network provides significant benefits for SMEs by unlocking capital that many of them need that was unavailable in the past from the financial

293、 institutions.Singapore Public Innovation Facilitators The Go Digital Programme Created by the Infocomm Media Development Authority helps SMEs develop Industry Digital Plans(IDPs)to chart out the various stages of their transition to digitized workflows(Smart Nation website).Singapore Public Innovat

294、ion Facilitators GoBusiness Jointly developed by the Ministry of Trade and Industry,Smart Nation and Digital Government Group,and GovTech as the online platform for all business interactions with the government.Singapore Public Innovation Facilitators Chief Technology Officer(CTO)-as-a-Service schem

295、e Infocomm Media Development Authority(IMDA)launched the Chief Technology Officer(CTO)-as-a-Service scheme to provide consultancy services to SMEs on areas such as data analytics,cyber-security,and artificial intelligence Singapore Public Regulatory Sandbox Regulatory Sandbox MAS has also created Re

296、gulatory Sandboxes to allow FinTech firms to conduct predetermined operations without complying to all regulations that would be naturally required.The goal of the regulatory sandbox is to even the playing field with FIs,who have no licensing restrictions to test out new innovative products.The sand

297、box provides an environment where new ideas can be tested by relaxing some regulations but restricting the scope of activities and/or market to control the extent of any potential damages.The regulations to be relaxed are determined on a case-by-case basis and will last for a specified duration,afte

298、r which all regulations will begin to apply.42 Singapore Private Robo-advisor GoBear GoBear is a financial products comparison site.Users can search,compare,and select the plan,card,or loan they want.On April 8th,2021,GoBear was acquired by Finder.Singapore Private Insurtech Singapore Life Singapore

299、 Life is a life insurance company fully licensed by the Monetary Authority of Singapore.Singapore Life offers high net worth universal life solutions for those that prefer Singapore and the Singapore regulatory environment as a destination for their wealth and protection needs.Thailand Public Innova

300、tion Facilitators Digital Economy Promotion Agency(depa)The Thai government established the Digital Economy Promotion Agency(depa)under the Digital Development for Economy and Society B.E.2560(2017),it aims to support the development of digital industry and innovation.It will promote digital technol

301、ogy adoption to benefit the economys market,society,culture and security,according to Article 35 of the Act.A commission,whose members are appointed by the minister of Digital Economy and Society,is authorized to regulate and ensure the agencys performance.It has several tasks mainly to develop a st

302、rategic plan for the promotion of the digital economy in accordance with economy-level policy and plans,promote and support private investment and business operations related to the digital industry and innovation Thailand Public Innovation Facilitators depa JumpStart the digital startup incubation

303、program that offers opportunities for entrepreneurs and interested people from all over the economy.depa Jumpstart combines online and offline learning for entrepreneurs or general people to confidently start a Digital Startup business Thailand Public Innovation Facilitators depa Accelerator Program

304、 x Techsauce startup support program that depa collaborates with Techsauce to find 20 Startup teams joining the program with a global mentor through a partnership between private and public sectors.Thailand has joined the program to increase market opportunities and increase Thailands readiness in t

305、erms of technology to reach the international level and emphasize the importance of digital startups that use digital technology intensely 43 Thailand Public Innovation Facilitators Tech Tycoon+Network development activity for digital startups and technology entrepreneurs that are ready to grow in b

306、oth domestic and international markets.It consists of intensive scale up business training activities,business matching activities to expand business opportunities and one-to-one mentoring activity to prepare Digital Startup entrepreneurs to grow into regional and global enterprises Thailand Public/

307、Private Innovation Facilitators Startup Battleground Hackathon event held at Digital Thailand Big Bang.This is due to the cooperation between the public sector,the Thai private sector and the global private sector,including the Digital Economy Promotion Agency(depa)and Hubba Company Limited(HUBBA Th

308、ailand)together with the leading Techstars(Techstars)accelerator.World class Hackathon with the objective of raising ideas to create new innovations for the top 10 target industries(S-Curve)that will benefit the economys development.It also serves as a platform to create opportunities for new startu

309、ps to gain experience from participating in workshops with highly qualified speakers and real stage competition The Philippines Public Regulation Open Finance(BSP Circular No.1122 series of 2021)as a Policy/Technology Enabler for the Philippines The Open Finance Oversight Committee Transition Group(

310、OFOC-TG)was established to develop the operational policies and standards towards the creation of the formal OFOC.The BSP is finalizing the roadmap and standards to be used in the pilot uses cases as follows:Account aggregation/Statement sharing Direct Debit or fund transfer Account Opening The Phil

311、ippines Public Regulation BSP Circular No.1108 series of 2021 Guidelines for Virtual Asset Service Providers as a Policy/Technology Enabler for the Philippines This circular provides the enhanced guidelines to be adhered to by BSP-registered VASPs to ensure robust risk management in terms of AML,cyb

312、ersecurity,and consumer protection risks.44 The Philippines Public Regulation BSP Circular No.1105 series of 2020 Guidelines on the establishment of Digital Banks as a Public Type of policy enabler This circular sets out the licensing framework for a new type of bank that purely delivers banking pro

313、ducts and services in the digital space in order to capture a broader reach of unserved and underserved market segments.The Philippines Public Innovation Facilitators Technology Integration&Adoption Programme The Bangko Sentral ng Pilipinas is seeking to“lead by example”by further integrating techno

314、logy into its own operations.To do so,the BSP has partnered with RegTech for Regulators Accelerator(R2A),an organization started by USAID,the Gates Foundation,and the Omidyar Network to help regulatory authorities adopt new technologies.Working with R2A,the BSP is developing its own set of applicati

315、on programming interfaces(APIs)to allow supervised financial institutions to submit reporting digitally and automatically.This will enable the BSP to receive data more frequently,validate data quality,and apply new tools for the analysis of the data that banks,and other financial institutions submit

316、.The Philippines Private Digital Banking Project i2i UnionBank has sought to create a new ecosystem to facilitate domestic remittances between rural banks by partnering with the US-based FinTech firm ConsenSys,created a blockchain-based,interbank payment switch to streamline and digitize the process

317、 of sending domestic remittances from one rural Bank to another.The hundreds of rural banks in the Philippines are primarily deposit-taking institutions that extend high-interest loans to farmers,fisherfolk,and microenterprises in rural communities.The Philippines Public Innovation Facilitators Nati

318、onal Retail Payment System(NRPS)Created by the BSP,the NRPS states that all supervised financial institutions must adopt transparent and fair market pricing of electronic payments,transition from exclusive bilateral to multi-party clearinghouse agreements,and provide electronic fund transfer facilit

319、ies in all available channels for individuals and SMEs The Philippines Public Digital Payments PESONet Philippine EFT System and Operations Networkbatches electronic fund credits for transfers between banks with the aim of replacing the use of checks.45 The Philippines Public Digital Payments InstaP

320、ay Electronic fund transfer system that enables“almost immediate”transfers of up to PHP 50,000(or about USD 100)on demand.USA Private Digital Payments Square Square,a US-based FinTech founded in 2009,introduced an innovative way to accept card payments without the use of a traditional,clunky,and exp

321、ensive POS device,making it possible for any SME to convert their smart phone or tablet into a mobile POS(mPOS)device with a USD 10 card reader to accept credit,debit cards,and NFC payments.The company has revolutionized the payments sector by making it extremely easy for a wide variety of small bus

322、inesses,from a single vendor at a farmers market to multi-location businesses,to fully digitize their payments with an integrated software and card reader solution.Square has millions of merchants using its software and card readers in the United States,Canada,Japan,Australia,and the United Kingdom.

323、USA Public Innovation Facilitators Virtual Innovation Office Hours Programme The Consumer Financial Protection Bureau(CFPB)and the Office of the Comptroller of the Currency(OCC)hosted joint,virtual Innovation Office Hours,July 29-30,2020,as part of the American Consumer Financial Innovation Network(

324、ACFIN).Office Hours are one-on-one meetings with representatives from the OCC and CFPB Offices of Innovation to discuss financial technology(FinTech),new products or services,partnering with a bank or FinTech company,or other matters related to responsible innovation in financial services.Each meeti

325、ng will last no longer than one hour.USA Private SME Lending Amazon Lending Founded in 2012 to extend credit to small businesses selling on Amazons platform.Amazon uses internal algorithms to choose sellers based on data points,such as the frequency at which merchants run out of stock,the popularity

326、 of their products and inventory cycles.USA Private Balance Sheet Lending Fundbox AI-powered financial platform for small businesses that offers fast and intuitive access to business credit.Since their founding in 2013,nearly 300,000 small businesses have applied for loans with this FinTech.46 USA P

327、rivate Cryptoassets Alphapoint White-label software company powering crypto exchanges worldwide.AlphaPoint has enabled over 150 customers in 35 economies to launch and operate crypto markets,as well as digitize assets.AlphaPoint and its award winning blockchain technology have helped startups and in

328、stitutions discover and execute their blockchain strategies since 2013.Viet Nam Private SME Lending Finaxar Finaxar Viet Nam,Indovina Bank,and Cathay Financial Holdings partnered up to improve access to financing for Viet Namese SMEs.The partnership provides working capital to SMEs with easier,more

329、streamlined access to credit through Indovina Banks online credit line product powered by Finaxar.Finaxar Credit Line is a first-in-region,completely online,automated credit financing solution,specifically tailored for Viet Nams SMEs.Business owners can access funds of up to VND500 million(USD 21,70

330、0)through this online system,which charges a small fee.5.3 INNOVATIVE MODELS TO IMPROVE FINANCIAL INCLUSION The focus of this exercise is to identify innovative models and technologies private sector FinTechs have utilized to improve financial inclusion,especially to SMEs and women.Table 4 presents

331、examples of key FinTech innovations by economy,as well as common practices that are specific to the economies studied.Most of the models assessed are from the private sector,however in cases where a government or regulator had innovative policies in place,they were also included.In the table below m

332、ost of the innovative models listed are from the private sector financial institutions or FinTech companies,a few however,such as Canadas shift towards digital identity wallets,engage both private and public partners.The expected and observed impacts of each model are also presented.Table 4:Innovati

333、ve Models to Improve Financial Technology Innovation Summary of the Innovative Model Expected/Observed Impact Neobanks Australian“neobanks”offer faster,simpler service and more competitive rates by providing banking services entirely within a mobile app.More competitive rates and lower fees for neobank users Faster and more diversified service for neobank users Digital Identity Wallets Canadian lo