FinTech constitutes a rapidly evolving industry in a European spectrum aiming to develop digital products, e-payments and technology solutions in order to render every day transactions and financial services more efficient, accessible and user-friendly. The unique feature of the latter is that the range of the provided services is not limited to the banking sector but additional domains, such as Bank2Customer, B2B, Bank2Business, are also included.
The last years, global borders among traditional finance and the technological sector have begun to blur and the Fintech novelty has become progressively competitive. This situation is not differentiated in Greece, especially after the financial crisis of 2016, when the Greek FinTech industry emerged as a radical domain bolstering the static economy and, eventually, presenting substantial growth trends. However, as the FinTech industry in Greece grows, it’s of pivotal importance for all parties involved to comprehend its impact and subsequently identify the risks correlated with its adoption. Towards this direction, the development of a robust and versatile regulatory framework emerges as an imperative action, able to provide both further legitimate solutions as well as an adequate degree of consumer protection.
The adoption of a regulatory framework regarding the FinTech industry may tackle several inconsistencies of the Greek society and that’s why the Bank of Greece (BoG) requested support from the European Commission for the establishment of a Regulatory Sandbox to strengthen FinTech and Innovation. Greece has struggled in relation to the digital transformation of its economy and thus the implementation of an innovative legal framework may foster modern and fast-paced markets aiming to support the demands of entrepreneurs and investors.
This framework, operating as a live testing environment, may yield positive results to the fields of innovation and consumer protection, taking into account the adversity of applying the traditional Greek legal framework to technology-oriented financial products and services. The existing legal and regulatory frame of Greece is adapted to obsolete financial strategies and ways of transactions and its mainly tailored to assist issues arising from the traditionally formed banking institutions. Therefore, the rise of the FinTech industry in Greece emerges the phenomenon of a ‘regulatory lag’, namely the inadequacy of the competent legal authorities to keep up with the volatile technological scenery. Thus, the adoption of a flexible Regulatory Sandbox shall facilitate both Greek financial institutions into planning their business strategies as well as end-users into understanding the potential of FinTech and in the same time protecting themselves from potential risks of this sector.
The BoG, cooperatively with the European Bank for Reconstruction and Development (EBRD) and the European Commission’s DG REFORM, will attempt to launch the Regulatory Sandbox. In particular, the latter will engage an expertized in financial markets regulation consulting entity (the Consultant) which is also experienced in crucial technological areas such as DLT, cloud computing, AI etc. This Consultant will combine sophisticated knowledge of the Fintech area and the Greek regulatory system in order to provide a complete analysis for the Regulatory Sandbox’s effect to the Greek financial area. In a concluding note, this BoG’s initiative constitutes a groundbreaking move capable of modernizing Greek’s financial services and in the same time integrating its “wounded” economy among Europe’s leading FinTech markets.
The editorial team