## Executive Summary vii

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### Introduction
- Purpose:
  - Summarizes staff findings on institutional arrangements for fintech supervision and regulation following approval of the Bali Fintech Agenda (BFA).
  - Covers in some detail 10 jurisdictions (advanced economies, emerging market and developing economies).
  - Prepared as background for the June 17, 2019 IMF Executive Board discussion, "Fintech: The Experience So Far."
  - Based on interviews and research of publicly available documents.
- Policy objective:
  - Ensure financial systems are resilient to technological change without impeding transformation, innovation, and competition.
- Key regulatory tension:
  - Activity-based versus entity-based approaches to regulation; many jurisdictions use a combination of entity and activity-based regulation.

### Division of Fintech Responsibilities
- General findings:
  - Fintech institutional frameworks largely mirror established responsibilities for financial sector policy, supervision, and development.
  - Ministries of finance typically lead high-level policy coordination and formulation.
  - Financial supervisory authorities play an active, multifaceted role.
  - Law enforcement agencies engage on fintech-related financial crimes (fraud, money laundering, terrorist financing).
  - Other authorities (telecommunications, IT, industrial development) sometimes involved.
- Variations in emphasis:
  - Some regulators prioritize traditional prudential and conduct objectives; others emphasize innovation, inclusion, competition and development.
  - Statutory mandates or agency leeway can shape internal structures and staff allocation.
- Country examples and notable numeric/financial details:
  - Singapore: MAS committed about US$170 million for fintech initiatives.
  - Global Financial Innovation Network (GFIN): brings together regulators from more than 50 jurisdictions.

### Organization of Authorities’ Fintech Functions
- Typical model:
  - A dedicated core fintech group (hub) plus an expert network across the agency ("hub and spoke").
  - Core groups vary greatly in size and function; some staffed by newly hired technical experts, others by redeployed internal talent.
- Core group functions (observed across sample):
  - act as point of contact for fintech firms;
  - run a sandbox;
  - coordinate domestically with other authorities;
  - coordinate internationally;
  - monitor fintech developments;
  - provide internal training;
  - assess fintech applications to supervision processes;
  - in a few cases, supervise fintech firms.
- Organizational variations and examples:
  - Formal terms of reference exist in France, Japan, and the United Kingdom.
  - MFSA FinTech and Innovation Function (2019) has two teams: virtual financial assets and a FinTech Team implementing the fintech strategy.
  - DFSA included fintech facilitation in its rulebook since August 2018.
  - JFSA (Japan) uniquely noted for supervision of crypto assets and platforms.
- Trade-offs:
  - Dedicated fintech teams provide technical expertise and streamlined processes.
  - Distribution of responsibilities across routine supervision units spreads expertise across risk disciplines.
  - Clear mandates are essential for effectiveness.

### Domestic Coordination
- Typical mechanisms:
  - Use of existing senior-level structures; referral to sub-committees or creation of taskforces when fintech issues arise.
  - Regulatory sandboxes and innovation hubs widely used to reduce regulatory uncertainty.
  - Most jurisdictions find new legislation unnecessary; interpretation of existing rules often sufficient.
- Country coordination examples:
  - France: AMF FIC division coordinates with ACPR FIU; Joint Fintech Forum launched in 2016 (three-year mandate); involvement of CNIL for data protection.
  - Kenya: Joint Financial Services Forum for senior officers; emphasis on cybersecurity; ICT ministry resubmitted a 2016 data protection bill in late 2017/early 2018.
  - Hong Kong SAR: Financial Leaders Forum (FLF) and Council of Financial Regulators (CFR).
  - United States: FSOC and FFIEC; FBIIC supports coordination and public–private partnerships.
  - Japan: BOJ Fintech Center promotes interaction; BOJ is not regulating or supervising fintech firms.

### International Coordination
- Instruments:
  - Bilateral MOUs and letters of intent for information sharing.
  - Multilateral initiatives and participation in standard-setting bodies (SSBs).
- Notable initiatives and timeline references:
  - HKMA–MAS technical cooperation exploring linkage of DLT trade finance platforms between Hong Kong SAR and Singapore.
  - Global Financial Innovation Network (GFIN): aims to collaborate, share experience, conduct joint policy work, and facilitate responsible cross-border experimentation (a "global sandbox"); the UK’s FCA was a driving force.
  - BCBS taskforce on Fintech and BCBS sound practices (2018).
  - FATF changes to Recommendations and Glossary (October 2018) to clarify applicability to virtual assets.
  - IOSCO consultation report on crypto-asset trading platforms (May 2019).
  - FSB’s Financial Innovation Network and Standing Committee on Supervisory and Regulatory Cooperation working on cooperation between SSBs.
- Leverage:
  - Home–host supervisory relationships, supervisory colleges, and legal frameworks facilitate cross-border and cross-sector information sharing.

### Prospects for Change and Ongoing Adaptation
- Core challenges fintech poses to institutional arrangements:
  - Clear mandates;
  - Effective coordination;
  - Flexibility to adapt quickly.
- General observations:
  - Institutional arrangements vary by country-specific circumstances, mandates, and strategies.
  - Regulators show flexibility to amend and adjust arrangements; strength of frameworks will be tested under stress.
  - Cross-agency domestic coordination and international cooperation are critical to limit regulatory arbitrage and contain new risks.

### Cross-country institutional arrangements and overall findings
- Three decisive factors to meet the fintech challenge:
  - a clear mandate;
  - flexibility;
  - effective coordination.
- Practical implications:
  - Fintech activities transcend existing regulatory perimeters; cross-agency approaches are needed for consistency and risk containment.
  - Cooperation between domestic and international authorities is key to a holistic regulatory approach and to strengthen trust in the financial system.

### Country and Agency Developments (selected highlights with exact references)
- Malta:
  - MFSA issued a consultation on the establishment of a regulatory sandbox in July 2019.
  - In July 2019 MFSA also issued a consultation document on security token offerings.
  - Plans to expand their core fintech group from three to six people once the Fintech Guiding Framework that has been sent to their board is approved.
  - A legislative proposal is under development to expand the regulatory perimeter.
- United States:
  - Fintech units across supervisory agencies: Operational Risk and Fintech Section at FRB, Office of Innovation at OCC, FinHub at the Securities and Exchange Commission, LabCFTC at the Commodity Futures Trading Commission.
  - No major federal-level structural changes envisaged.
  - The 2018 US Treasury report made recommendations; overall impact on institutional structure expected to be limited.
  - State-level initiatives: Arizona set up a fintech sandbox run by the Office of the Arizona Attorney General; a bill was introduced in the Illinois General Assembly to create a sandbox.
- United Kingdom:
  - No major institutional changes contemplated at FCA, PRA, or BoE.
  - FCA reorganized to introduce the Innovative Department; PRA Hub mandate described as broad and flexible.
  - Crypto‑Asset Taskforce raised the possibility of extending FCA’s mandate to cover crypto assets more effectively.
  - BoE’s Future of Finance Report (June 2019) led to an action plan including establishing a public–private working group with the FCA on artificial intelligence.
- United Arab Emirates:
  - Central bank preparing a Fintech Strategy and Roadmap; legislative change not contemplated but plans for a new organizational unit with its own reporting path to the Executive Committee are in place.
- Switzerland:
  - FINMA amended fintech licensing circulars recently; no institutional changes planned to accommodate potentially larger application volumes.
- Singapore:
  - MAS developing a pilot Payments Regulatory Evaluation Program with the Singapore Academy of Law; launched in November of 2019, targeting fintech companies in payment services.
- Japan, France, Hong Kong SAR, Kenya and others:
  - Agencies perform fintech-related functions including monitoring, policy/research, training, suptech/internal functions, sandboxes, supervision, and coordination (see Appendix I for agency-function mapping).

### Institutional Themes and Policy Implications
- Clear mandate:
  - Enables effective organizational adjustments and reassessment as fintech evolves.
- Flexibility:
  - Agencies that can adapt structures and processes will be better placed to address rapid fintech changes; resilience will be proven under stress.
- Effective coordination:
  - Cross-agency domestic coordination is required to limit regulatory arbitrage and contain new risks.
  - International cooperation is important for holistic regulation and trust in the financial system.
- Practical implementation steps observed:
  - Establish fintech units or hubs (examples: FRB, OCC, SEC, CFTC; MFSA plans to expand staff).
  - Create regulatory sandboxes (examples: Malta consultation; Arizona sandbox; Illinois bill proposed).
  - Issue guidance and consultations on emerging areas (security token offerings; Fintech Guiding Framework).
  - Launch pilot programs linking fintech firms with legal and regulatory expertise (Payments Regulatory Evaluation Program in Singapore).

### Appendix I — Fintech functions by agency (summary of mappings)
- Appendix maps agencies to functions: Point of contact; Monitoring; Policy, research, and analysis; Training and education; Suptech and other internal functions; Sandbox; Supervision of existing fintech firms; Coordinating within government; International coordination.
- Selected entries and markers preserved from the table:
  - FRANCE: AMF — x for Monitoring, Policy/research/analysis, Training and education, Sandbox, International coordination; ACPR — x for Monitoring, Policy/research/analysis, Training and education, International coordination; BdF — x for Point of contact.
  - HONG KONG SAR: HKMA — x across Monitoring, Policy/research/analysis, Sandbox, Supervision, Coordinating, International coordination; SFC — x across Monitoring, Policy/research/analysis, Training and education, Suptech/internal functions.
  - JAPAN: JFSA — x across Point of contact, Monitoring, Policy/research/analysis, Training and education, Suptech/internal functions, Sandbox, Coordinating, International coordination.
  - KENYA: CMA — 1 (focused currently on building a sandbox), x for Monitoring, Policy/research/analysis, o for Training, x for Sandbox, x for Supervision.
  - MALTA: MFSA — 2 (plans underway to create a hub and a sandbox), o for Monitoring, o for Policy/research/analysis, x for Sandbox; MDIA — x*.
  - UNITED ARAB EMIRATES: DFSA — x across Monitoring and Policy; Central Bank — o across many functions.
  - UNITED KINGDOM: Bank of England and FCA — x across multiple functions including Monitoring, Policy/research/analysis, Training, Suptech/internal functions, Sandbox, Supervision.
  - UNITED STATES: Federal Reserve, OCC, SEC, CFTC — x across many functions; FDIC and CFPB show planned or partial roles (o markers).
  - SINGAPORE: MAS — x across Monitoring, Policy/research; footnote 3 indicates consumer education and outreach through MoneySENSE.
  - SWITZERLAND: FINMA — x for Monitoring, Policy/research/analysis, Training and education.
- Notes and footnotes preserved:
  - o: planned, *: preliminary.
  - Footnotes reproduced as in source: 1 Focused currently on building a sandbox. 2 Plans underway to create a hub and a sandbox. 3 Consumer education and outreach through MoneySENSE, Singapore government national financial education program.
- Acronym key retained as in source (examples): ACPR; AMF; BdF; CFPB; CFTC; CMA; DFSA; FCA; FDIC; FINMA; HKMA; JFSA; MAS; MDIA; MFSA; OCC; SEC; SFC.

*International Monetary Fund | December 2019*

### Executive Summary vii

### Executive Summary vii

### Introduction
- Following the approval of the Bali Fintech Agenda (BFA), staff conducted in-depth reviews of selected topics, of which one was the institutional arrangements for fintech supervision and regulation.
- This note summarizes the findings.
- It covers in some detail 10 jurisdictions, including both advanced economies, emerging market and developing economies.
- It concludes with some general observations.

### Division of Fintech Responsibilities
- The fintech institutional framework mostly mirrors the established responsibilities for financial sector policy, supervision, and development.
- Ministries of finance typically lead on high-level policy coordination and formulation.
- Financial supervisory authorities have an active, multifaceted role.
- Law enforcement agencies engage on fintech-related financial crimes, including money laundering and terrorist financing.
- Sometimes, other authorities such as those dealing with telecommunications, IT and industrial development, are involved in regulating fintech too.
- Countries differ in the emphasis placed on promoting the development of fintech as opposed to regulating it.
  - Some regulators prioritize traditional prudential and conduct objectives.
  - Others give more weight to innovation, inclusion, competition and development.
  - This can be a matter of statute or individual agencies can have the leeway to manage their priorities.
  - Either way, this can affect internal structures such as the separation of reporting lines and the allocation of staff resources.

### Organization of Authorities’ Fintech Functions
- Most supervisors have set up a core fintech group and an expert network.
  - The core group is usually full time and is supported by a network of experts across the agency which is available to help as needed on specific issues.
  - Core groups vary greatly in size depending on their functions.
- Core group functions can include:
  - act as point of contact for fintech firms;
  - run a sandbox;
  - coordinate domestically with other authorities;
  - coordinate internationally;
  - monitor fintech developments;
  - provide internal training;
  - assess fintech applications to supervision processes; and
  - in a few cases, supervise fintech firms.
- To staff their core groups, some authorities have relied more on newly hired technical experts while others depended on internal talent.

### Domestic and International Coordination
- Domestic coordination typically makes use of existing senior level structures; when fintech issues arise, they are referred to a sub-committee or result in the creation of a taskforce to develop proposals.
- International coordination arrangements range from bilateral agreements and initiatives (e.g., fintech Memoranda of Understanding) to multilateral ones coordinated by the standard-setting bodies.
- A new multilateral network, the Global Financial Innovation Network, has recently been set up to:
  - exchange learnings,
  - develop a common sandbox and
  - help firms navigate between different jurisdictions as they aim for scale internationally.

### Prospects for Change
- Fintech presents a challenge to existing institutional arrangements in three ways: clear mandates, effective coordination and flexibility.
- Regulators must rise to the challenge if fintech is to thrive without causing financial instability.
- To that end:
  - agencies and internal structures they create should have clear mandates;
  - since fintech tends to cross regulatory boundaries, effective coordination is critical, both domestically and internationally; and
  - regulators need to be prepared to change their institutional arrangements quickly given the speed and ubiquity of fintech development.

*International Monetary Fund | December 2019*

### Introduction

### Introduction

### Rapid advances in financial technology: opportunities and risks
- Fintech is "transforming the economic and financial landscape, offering wide-ranging opportunities while raising potential risks."
- Potential benefits: strengthen financial development, inclusion, and efficiency.
- Potential risks: financial stability and integrity risks, consumer and investor protection concerns, heightened operational risks, data privacy risks.
- Policy objective: ensure financial systems are resilient to technological change without impeding transformation, innovation, and competition.
- Key regulatory tension: activity-based versus entity-based approaches to regulation; many jurisdictions use a combination of entity and activity-based regulation.

### Scope and purpose of the note
- Sample: reviews institutional arrangements for fintech in 10 jurisdictions (advanced economies and emerging market and developing economies).
- Prepared as background for the June 17, 2019 IMF Executive Board discussion, "Fintech: The Experience So Far."
- Method: combination of interviews and research of publicly available documents.
- Describes:
  - (i) the division of responsibilities among national authorities;
  - (ii) the organization of supervisory authorities’ main fintech functions; and
  - (iii) domestic and international coordination on fintech matters.

### Division of fintech responsibilities: who leads and why
- Ministries of Finance take an active interest in fintech in every country in the sample, leading high-level policy coordination, policy formulation, and development of legislation.
- Supervisory responsibilities typically follow existing frameworks and mandates, falling under three common supervisory structures:
  - (i) a twin peaks model with a prudential and conduct supervisor;
  - (ii) a sectoral approach divided along industry lines (banking, insurance, capital markets); or
  - (iii) a single, integrated supervisory authority.
- Country examples and institutional arrangements (summarized from the sample):
  - United Kingdom and France: largely twin-peaks prudential vs. conduct split; examples include the BoE Fintech Hub and the FCA Innovate Department; ACPR and AMF fintech units in France.
  - Hong Kong SAR and Kenya: sectoral/industry-line division; HKMA, SFC, IA each with fintech functions; five-pronged facilitation approach in Hong Kong SAR.
  - United States and UAE (federal level): industry-line division; OCC created a fintech unit for outreach.
  - Japan, Malta, Dubai and Abu Dhabi free zones: single consolidated financial sector regulators (JFSA, MFSA, DFSA, ADGM).
  - Singapore: MAS as central bank and integrated supervisor, fintech functions "under one roof"; MAS committed about US$170 million for fintech initiatives.
  - Switzerland: FINMA as integrated authority with a Fintech Desk and guidance for payment tokens, utility tokens, and asset tokens.
- Law enforcement is closely engaged with financial regulators on fraud, money laundering, terrorist financing, and other financial crimes.
- Nonfinancial ministries (industry, technology, telecommunications) are engaged to a lesser extent; telecom regulators often have limited collaboration even where telecom-driven fintech innovations exist.

### Organization of authorities’ fintech functions
- Typical model: a dedicated core fintech team (hub) plus a network of subject-matter experts across the institution ("hub and spoke" model).
- Functions commonly assigned to fintech units (see Appendix I referenced in source):
  - Acting as point of contact on fintech issues (including outreach) — most common function.
  - Monitoring fintech developments.
  - Undertaking research and analysis and developing policy.
  - Providing training and education of staff across the agency.
  - Exploring SupTech and internal fintech applications.
  - Running a sandbox (second most common function); not universal across sample.
  - Supervising existing fintech firms (noted as unique or nearly unique to JFSA in Japan with oversight of crypto assets and platforms).
  - Coordinating internally and with other government departments.
  - Coordinating internationally or supporting international affairs departments.
- Organizational variations:
  - Some fintech teams are single units; others are split functionally.
  - Formal terms of reference exist for units in France, Japan, and the United Kingdom; other jurisdictions are developing mandates (Kenya’s CMA, UAE central bank).
  - MFSA FinTech and Innovation Function (2019) has two teams: virtual financial assets and a FinTech Team implementing the fintech strategy.
  - DFSA includes fintech facilitation in its rulebook since August 2018.
  - U.S. agencies present a mixed picture regarding published mandates.
- Trade-offs:
  - Dedicated fintech teams offer technical expertise and streamlined processes.
  - Distribution of responsibilities across routine supervision units spreads expertise across risk management disciplines.
  - Clarity of mandates is essential for fintech units to achieve objectives.

### Domestic coordination: mechanisms and examples
- Coordination beyond main financial regulators is often limited; formal senior-level coordination between financial authorities and Ministries of Finance is common.
- When fintech issues arise, they are often referred to subcommittees or taskforces.
- Regulatory sandboxes and innovation hubs are commonly used to reduce uncertainty about regulation and licensing expectations.
- Most jurisdictions find new legislation is not necessary; interpretation of existing rules/policies is frequently sufficient.
- Examples of domestic coordination from the sample:
  - France: AMF FIC division coordinates with ACPR FIU; Joint Fintech Forum launched in 2016 (three-year mandate); involvement of CNIL for data protection.
  - Kenya: Joint Financial Services Forum for senior officers; emphasis on cybersecurity as a cross-cutting issue; ICT ministry resubmitted a 2016 data protection bill in late 2017/early 2018.
  - Hong Kong SAR: multiple-agency approach with Financial Leaders Forum (FLF) and Council of Financial Regulators (CFR) for cross-sector coordination.
  - United States: FSOC and FFIEC take up fintech issues; FBIIC aids coordination and public–private partnerships.
  - Japan: BOJ established a Fintech Center to promote interaction among financial practices, innovative technologies, research, and societal needs (BOJ is not regulating or supervising fintech firms).

### International coordination: emerging multilateral and bilateral work
- Bilateral MOUs and letters of intent exist for information sharing on fintech.
- Examples of cross-border technical cooperation: HKMA–MAS initiative exploring linkage of DLT trade finance platforms between Hong Kong SAR and Singapore.
- Multilateral coordination: Global Financial Innovation Network (GFIN)
  - Brings together regulators from more than 50 jurisdictions.
  - Aims to collaborate, share experience and best practice, conduct joint policy work, and facilitate responsible cross-border experimentation (a "global sandbox").
  - The UK’s FCA was a driving force in GFIN’s creation.
- Participation in international standard-setting bodies (SSBs) and initiatives:
  - BCBS taskforce on Fintech and BCBS sound practices (2018).
  - IOsC fintech network and initial coin offering network; IOSCO consultation report on crypto-asset trading platforms (May 2019).
  - FATF changes to Recommendations and Glossary (October 2018) to clarify applicability to virtual assets.
  - FSB’s Financial Innovation Network and Standing Committee on Supervisory and Regulatory Cooperation working on cooperation between SSBs.
- Leverage existing home–host supervisory relationships, supervisory colleges, and legal frameworks to facilitate information sharing for cross-border and cross-sector fintech activities.

### Prospects for change and ongoing adaptation
- Institutional arrangements vary across jurisdictions and reflect country-specific circumstances, mandates, and strategies.
- Regulators demonstrate flexibility to amend and adjust arrangements to meet mandates and fintech challenges.
- Examples of planned or considered changes from the sample:
  - France: ACPR and AMF hubs set up in 2016; no changes planned, though bigtech and larger projects may require different approaches.
  - Hong Kong SAR: no new legislation planned; HKMA structure relatively new; more formal coordination channels may emerge.
  - Japan: JFSA not planning significant institutional changes in the near term; considering monitoring fintech beyond crypto assets; may assign more staff to fintech functions over time.
  - Kenya: CMA launched a sandbox in March (text truncated in source).

_International Monetary Fund | December 2019_

### 2019. It has already issued a policy guidance note

### 2019. It has already issued a policy guidance note

### Cross-country institutional arrangements and overall findings
- A brief review demonstrates the importance of three factors to meet the fintech challenge: a clear mandate, flexibility, and effective coordination.
- Countries continuously reassess the appropriateness of their current structures and readjust them as needed provided that the clarity of the mandate allows for effective organizational adjustments.
- Flexibility is crucial, but the strength of any framework will only be fully tested under stressed conditions.
- Agencies with demonstrated flexibility to adapt should be well-suited to meet the challenges of fintech.
- Effective coordination is essential to successfully meet the challenges of fintech and harness the potential benefits.
- Fintech activities will not be bound by the existing regulatory perimeter; a cross-agency approach is needed to support consistency, limit regulatory arbitrage, and contain new risks.
- Cooperation between different domestic and international authorities is key to ensure a holistic approach to regulation and to help solidify trust in the financial system.

### Country and agency developments (selected highlights)
- Malta
  - MFSA issued a consultation on the establishment of a regulatory sandbox in July 2019.
  - In July 2019 MFSA also issued a consultation document on security token offerings.
  - Plans to expand their core fintech group from three to six people once the Fintech Guiding Framework that has been sent to their board is approved.
  - A legislative proposal is under development to expand the regulatory perimeter.
- United States
  - Considerable effort has been put into establishing fintech units across supervisory agencies (Operational Risk and Fintech Section at FRB, Office of Innovation at OCC, FinHub at the Securities and Exchange Commission, and the LabCFTC at the Commodity Futures Trading Commission).
  - No major changes in structure are envisaged at the federal level.
  - The 2018 US Treasury report made several recommendations that will affect federal financial regulators, but, by and large, their impact is not expected to be substantial on institutional structure or the organization of fintech functions.
  - State-based regulations covering virtual currency and blockchain technologies are being developed and implemented.
  - Arizona recently set up a fintech sandbox run by the Office of the Arizona Attorney General.
  - A bill was introduced in the Illinois General Assembly to create a sandbox there too.
- United Kingdom
  - Major institutional changes are not contemplated at either the FCA, PRA, or BoE.
  - The FCA has reorganized to introduce the Innovative Department.
  - The PRA Hub mandate is broad and flexible; the two agencies are complementary.
  - They plan to assess how well the new FCA arrangements work before considering further major institutional changes.
  - The Crypto-Asset Taskforce raised the possibility of extending the FCA’s regulatory mandate to cover crypto assets more effectively.
  - The BoE’s Future of Finance Report (published in June 2019) outlined changes and new risks; the BoE responded with a detailed action plan including establishing a public–private working group with the FCA and firms to further dialogue on artificial intelligence, and to explore whether principles and guidance could support safe adoption of these technologies.
- United Arab Emirates
  - The central bank is preparing a Fintech Strategy and Roadmap.
  - Legislative change is not contemplated, but plans for a new organizational unit, possibly with its own reporting path to the Executive Committee, are in place.
- Switzerland
  - FINMA has recently amended fintech licensing circulars, but no institutional changes are planned to accommodate a potentially larger volume of applications.
- Singapore
  - MAS is developing a pilot program with the Singapore Academy of Law to connect fintech companies with legal service providers.
  - The program, known as the Payments Regulatory Evaluation Program, launched in November of 2019, and targets fintech companies in payment services.
- Japan, France, Hong Kong SAR, Kenya and others
  - Various agencies have fintech-related functions such as monitoring, policy/research, training, suptech/internal functions, sandboxes, supervision of existing fintech firms, and domestic and international coordination (see Appendix I for agency-function mapping).

### Institutional themes and policy implications
- Clear mandate
  - Enables effective organizational adjustments and reassessment of structures as fintech evolves.
- Flexibility
  - Agencies that can adapt structures and processes will be better able to meet rapid fintech changes; true resilience will be proven under stress.
- Effective coordination
  - Cross-agency domestic coordination is required to limit regulatory arbitrage and contain new risks.
  - International cooperation is important for a holistic regulatory approach and for strengthening trust in the financial system.
- Practical implementation steps observed
  - Establish fintech units or hubs (examples: FRB, OCC, SEC, CFTC; MFSA plans to expand staff).
  - Create regulatory sandboxes (examples: Malta consultation; Arizona sandbox; Illinois bill proposed).
  - Issue guidance and consultations on emerging areas (security token offerings; Fintech Guiding Framework).
  - Launch pilot programs linking fintech firms with legal and regulatory expertise (Payments Regulatory Evaluation Program in Singapore).

### Appendix I — Fintech functions by agency (summary of mappings)
- The Appendix maps agencies to key fintech functions: Point of contact; Monitoring; Policy, research, and analysis; Training and education; Suptech and other internal functions; Sandbox; Supervision of existing fintech firms; Coordinating within government; International coordination.
- Notable entries from the Appendix table (markers preserved as in source)
  - FRANCE: AMF — x for Monitoring, Policy/research/analysis, Training and education, Sandbox, International coordination; ACPR — x for Monitoring, Policy/research/analysis, Training and education, International coordination; BdF — x for Point of contact.
  - HONG KONG SAR: HKMA — x across Monitoring, Policy/research/analysis, Sandbox, Supervision, Coordinating, International coordination; SFC — x across Monitoring, Policy/research/analysis, Training and education, Suptech/internal functions.
  - JAPAN: JFSA — x across Point of contact, Monitoring, Policy/research/analysis, Training and education, Suptech/internal functions, Sandbox, Coordinating, International coordination.
  - KENYA: CMA — 1 (focused currently on building a sandbox), x for Monitoring, Policy/research/analysis, o for Training, x for Sandbox, x for Supervision.
  - MALTA: MFSA — 2 (plans underway to create a hub and a sandbox), o for Monitoring, o for Policy/research/analysis, x for Sandbox; MDIA — x*.
  - UNITED ARAB EMIRATES: DFSA — x across Monitoring and Policy; Central Bank — o across many functions.
  - UNITED KINGDOM: Bank of England and FCA — x across multiple functions including Monitoring, Policy/research/analysis, Training, Suptech/internal functions, Sandbox, Supervision.
  - UNITED STATES: Federal Reserve, OCC, SEC, CFTC — x across many functions; FDIC and CFPB show planned or partial roles (o markers).
  - SINGAPORE: MAS — x across Monitoring, Policy/research; footnote 3 indicates consumer education and outreach through MoneySENSE.
  - SWITZERLAND: FINMA — x for Monitoring, Policy/research/analysis, Training and education.
- Notes in table preserved:
  - o: planned, *: preliminary.
  - Footnotes: 1 Focused currently on building a sandbox. 2 Plans underway to create a hub and a sandbox. 3 Consumer education and outreach through MoneySENSE, Singapore government national financial education program.
- Acronym key retained as in source (examples): ACPR; AMF; BdF; CFPB; CFTC; CMA; DFSA; FCA; FDIC; FINMA; HKMA; JFSA; MAS; MDIA; MFSA; OCC; SEC; SFC.

*International Monetary Fund | December 2019*

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_Source: https://www.imf.org/-/media/files/publications/ftn063/2019/english/ftnea2019002.pdf_