Wednesday, February 08, 2017 8.19AM / By Sarah Kocianski / Business Insider
Despite having one of the largest fintech industries in the world, the US is noticeably behind other regions when it comes to one factor crucial to the future growth of this burgeoning sector — regulation.
The US regulatory environment is holding back fintechs and hindering their chances of success.
A new report from BI Intelligence examines the current regulatory landscape in the US and how it's impacting the fintech industry. In addition, it discusses the methods fintechs are using to meet regulations as best they can, and details the fintech-specific initiatives that have already been launched by regulators and their likelihood of success. It also considers the future of fintech regulation in the US and how it may shape the fintech sector long term.
Here are some of the key takeaways from the report:
· The US' regulatory system involves many different players at the federal level, as well as a regulator for each state. This complexity not only makes the US regulatory environment harder for fintechs to navigate in the first place, but it's a major barrier to the development of a coherent fintech policy.
· The US regulatory landscape means it is falling behind other major fintech regions such as the UK and EU in certain segments. These regions already have established fintech regulatory policies.
· US fintechs are using a number of models to achieve compliance, but none are ideal. As a result, many are finding it hard to achieve the scale necessary for success.
· Some US regulators have realized the need to act regarding fintech regulation, and are launching initiatives with the aim of making compliance easier. That said, a coherent fintech regulatory policy for the US is still a long way off.
In full, the report:
· Examines the current regulatory landscape in the US.
· Explains how it is negatively affecting the fintech industry.
· Outlines the initiatives currently in play from major regulatory agencies.
· Considers the future of US fintech regulation and its potential impact on the fintech sector.
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