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The FinTech Revolution and Financial Regulation: The Case of Online Supply-Chain Financing

  • Chang-hsien TSAI (a1) and Kuan-Jung PENG (a2) (a3) (a4)
Abstract
Abstract

Online supply-chain financing has been a relatively novel funding channel for suppliers as small- and medium-sized enterprises (“SMEs”) to obtain loans in that the revolution of financial technology (“FinTech”) transforms traditional supply-chain financing, which used to be administered only by official banks, to an online model also used by electronic commerce platforms (“e-commerce platform”). Endeavours towards financial inclusion of the underserved SMEs could rationalize why we should allow for or encourage FinTech innovations exemplified by the online supply-chain financing mentioned above. What would be an adaptive regulatory regime for such innovative FinTech-enabled financial services as the online supply-chain financing? Within our conceptual framework to regulate the FinTech industry at the early stage, rather than rigorous rules traditionally placed on large financial institutions, a principles-based strategy should be adopted to strike a balance between financial stability and access to financial services advanced by disruptive innovations. As a necessary complement, regulatory sandboxes would be needed to spur a shift in institutional philosophy to a principles-based regulatory regime. In other words, the regulatory attitude of FinTech regulation should be humble and light-touch to promote innovation for improving digital financial inclusion, albeit on the premise of containing potential systemic risk and protecting consumer interest in the meantime.

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This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

John Armour , Dan Awrey , Paul Davies , Luca Enriques , Jeffery N. Gordon , Colin Mayer , & Jennifer Payne (2016) Principles of Financial Regulation, Oxford, UK: Oxford University Press.

Wei Shen (2016) Shadow Banking in China: Risk, Regulation and Policy, Cheltenham: Edward Elgar Publishing Limited.

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Asian Journal of Law and Society
  • ISSN: 2052-9015
  • EISSN: 2052-9023
  • URL: /core/journals/asian-journal-of-law-and-society
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