Financial Technology (“FinTech”) is a newly coined term that describes a global growing trend to adopt technology solutions and applications in the field of financial services and activities with view to improving and developing the service delivery in order to benefit all stakeholders such as banks, investment companies, their corporate and retail customers, and the regulators.
What are key areas of FinTech applications?
The key areas of FinTech applications are the financial services, which broadly include banking and financial services sector, investment companies, insurance company and tax. Examples of FinTech use include electronic payment and fund transfer platforms, and trading applications.
What are the legislations governing FinTech applications?
With respect to the legislation framework, the bodies that establish the legislation framework for FinTech applications are Central Bank of Kuwait for banks and Capital Markets Authority for investment and financial brokerage companies.
For banks, Central Bank of Kuwait issued Resolution No. 44/430 of 2018 issuing instruction for the regulation of electronic payment of funds. This instruction constitutes a framework for banks to submit an integrated business case as per the Resolution requirements in order to obtain license to carry on the business.
It is worth mentioning that Capital Markets Authority is in the process of issuing the legislation framework that will govern the FinTech applications and solutions.
How FinTech solutions are developed?
A bank may sponsor entrepreneur initiatives or establish incubator for developing FinTech solutions, which it intends to use. Once the development is completed, the bank submits the solution together with the business case to Central Bank of Kuwait to conduct testing thereon in the regulatory sandbox environment and then approve the same.
What is the added value to business entities from FinTech consulting?
- Keep pace with growing technology development in FinTech area to attain competitive advantages.
- Increase the size of automated process, and hence, minimize business risks.
What are the services offered by Baker Tilly?
- Developing business case studies of FinTech solutions as per CBK requirements
- Providing supervision and regulation consulting related to FinTech solutions