A Study on the Formation of the FinTech Policy and Regulatory Sandbox System of Singapore: From the Perspective of the Regulation of Disruptive Innovation
Disruptive innovation allows companies with relatively smaller size and limited resources to challenge long-existing enterprises with solid foundation in the market. As financial technology (FinTech) enterprises have been dominated by the technology industry instead of financial service industry, similar to other disruptive innovation firms, there are tensions between these FinTech companies and financial regulators as well as related laws and regulations. Given the rapid development of FinTech, designing a regulatory mechanism which gives consideration to effective regulation, assisting innovation and easing the tension between industry and regulators is one of the key elements to successfully establish a competitive FinTech industry. Fintech regulatory sandbox that is 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. It is considered a regulatory mechanism which can best strike balance between effective supervision and encouraging innovation. Having become the new Asia financial center, Singapore, following U.K., launched the regulatory sandbox system for FinTech start-ups. This paper will probe into the formation Singapore’s FinTech policy and the operation of its regulatory sandbox so as to provide a model for the development of Taiwan’s FinTech strategy and regulations.