FinTech boom needs strong guidance to navigate regulatory hurdles, finds ACCA
Despite the fact that FinTech has been causing significant digital disruption to global finance for almost a decade, the sector is still in need of strong guidance against regulatory hurdles, says a new report from ACCA (the Association of Chartered Certified Accountants).
The report, FinTech –transforming finance, finds that while FinTech’s impact on finance and banking is proving to be as revolutionary to the sector as the internet has been for other areas of the economy, the rapid growth of such firms in the face of traditional regulatory models could increasingly become a barrier to success.
Faye Chua, head of business insights at ACCA, thinks that the rise of FinTech is good news for industry innovation and consumer choice;
‘While the scale of transformation is hard to predict, there is no doubt that the impact of FinTech across the traditional functions of finance has been significant. Major banking institutions are already responding through large-scale research and investment in the face of competition from start-up challengers. This is good news for consumers and firms, as the explosion of choice in a traditionally conservative industry offers a range of new possibilities of doing business based around their bespoke needs.’
Yet Faye Chua argues that the regulatory challenges posed by the speed of innovation places tough demands on governments and business alike;
‘Despite the US benefitting from a head-start thanks to Silicon Valley’s global standing as an innovation centre, progress has been slowed through legislative and licensing hold-ups. This has really opened the door for other markets, such as the UK and across Asia-Pacific, where a combination of supportive regulatory framework and high digital capability is allowing the sector to flourish.
‘Yet while FinTech opens a range of possibilities for business, from new banks to streamlining payments and lending, exploiting these opportunities will require adaptation from firms as well. We are already seeing a burgeoning ‘RegTech’ (Regulation Technology) sector which can use automation and data-analysis to provide intelligent, low-cost solutions to streamline this process. Understanding the intricacies of global best practices and adapting them for varying national contexts can set aspiring FinTech hubs on a course for success.’
Faye Chua adds that it is professional accountants who will be best placed to navigate these obstacles;
‘While the rise of FinTech will reduce the labour time of much contemporary finance work, the fast-evolving nature of technology adoption will also necessitate transformations in tax compliance, audit and reporting processes
‘This will in fact place greater emphasis on the importance of having forward-thinking professional accountants equipped with a strong digital understanding and vision to guide firms through the opportunities and challenges ahead.’
- ends -
For media enquiries, contact:
David Bowden, ACCA Newsroom
T: +44 (0)20 7059 5622
M: + 44 (0)7540919819
Notes to Editors
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
ACCA supports its 188,000 members and 480,000 students in 178 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 100 offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: www.accaglobal.com