Unpacking Namibia’s fintech ecosystem: Definitions of fintech
The international definition of financial technology (fintech) is not settled, and Ramona Rupeika-Apoga attributes this to the versatile nature of fintech, the fact that it is in an active stage of development, and the increasing need for international cooperation and guidance.
Locally, the Bank of Namibia (BoN) has defined fintech in its Financial Technology (Fintech) Innovations Regulatory Framework (September 2022) as “technology-enabled innovation in financial services that could result in new business models, applications, processes or products with an associated material effect on financial markets and institutions and the provision of financial services.”
BoN’s definition of fintech was adopted from the Financial Stability Board and is premised on looking at how technology-enabled innovation disrupts and transforms the provision of financial services. This effect-based definition is also shared (in varying degrees) by the International Monetary Fund, the World Bank Group, the International Organisation of Securities Commissions and the Committee on Economic and Monetary Affairs of the European Parliament.
I commend BoN’s approach to regulating fintech in a manner that is responsive to the changing needs of the market whilst maintaining its mandate. For a fintech start-up and some technology developers, their interest in BoN’s fintech definition would probably be posited on having access to and being able to use ‘technology-enabled innovation in financial services [to birth] new business models, applications, processes or products’.
A customer’s definition of fintech would probably consider things like easy access, protection of their consumer rights and privacy, low costs and minimal risks.
In closing, allow me to draw your attention to the Organization for Economic Co-operation and Development’s definition of fintech — which is not a comprehensive statement, but rather an articulation of features that can assist the reader to understand what fintech is or is not — and it states that:
1. Fintech does not encompass only start-up companies (fintech start-ups).
2. Innovative technologies can be differentiated from innovations in financial services.
3. Beyond involving the application of technology to financial services, fintech also involves developing business models and products that rely on technology and, more generally, on digital platforms and processes.
4. Fintech does not rely on ‘new’ or ‘innovative’ technologies only; it also relies on existing technologies like the internet.
5. Fintech improves not only financial services but also the efficiency of internet processes, regulatory compliance and communications (https://www.oecd.org/finance/private-pensions/Financial-markets-insurance-pensions-digital-technologies-and-finance.pdf).
DISCLAIMER: I’m no expert on the topic of fintech. I’m writing this column for people who, like myself, have heard of the term fintech and want to learn more about the topic. So, let’s continue to learn together. Overall, I welcome your views, comments, queries, concerns and inputs – you can reach me at [email protected]. The views expressed in this column are entirely my own and not that of the Office of the Attorney-General.
Locally, the Bank of Namibia (BoN) has defined fintech in its Financial Technology (Fintech) Innovations Regulatory Framework (September 2022) as “technology-enabled innovation in financial services that could result in new business models, applications, processes or products with an associated material effect on financial markets and institutions and the provision of financial services.”
BoN’s definition of fintech was adopted from the Financial Stability Board and is premised on looking at how technology-enabled innovation disrupts and transforms the provision of financial services. This effect-based definition is also shared (in varying degrees) by the International Monetary Fund, the World Bank Group, the International Organisation of Securities Commissions and the Committee on Economic and Monetary Affairs of the European Parliament.
I commend BoN’s approach to regulating fintech in a manner that is responsive to the changing needs of the market whilst maintaining its mandate. For a fintech start-up and some technology developers, their interest in BoN’s fintech definition would probably be posited on having access to and being able to use ‘technology-enabled innovation in financial services [to birth] new business models, applications, processes or products’.
A customer’s definition of fintech would probably consider things like easy access, protection of their consumer rights and privacy, low costs and minimal risks.
In closing, allow me to draw your attention to the Organization for Economic Co-operation and Development’s definition of fintech — which is not a comprehensive statement, but rather an articulation of features that can assist the reader to understand what fintech is or is not — and it states that:
1. Fintech does not encompass only start-up companies (fintech start-ups).
2. Innovative technologies can be differentiated from innovations in financial services.
3. Beyond involving the application of technology to financial services, fintech also involves developing business models and products that rely on technology and, more generally, on digital platforms and processes.
4. Fintech does not rely on ‘new’ or ‘innovative’ technologies only; it also relies on existing technologies like the internet.
5. Fintech improves not only financial services but also the efficiency of internet processes, regulatory compliance and communications (https://www.oecd.org/finance/private-pensions/Financial-markets-insurance-pensions-digital-technologies-and-finance.pdf).
DISCLAIMER: I’m no expert on the topic of fintech. I’m writing this column for people who, like myself, have heard of the term fintech and want to learn more about the topic. So, let’s continue to learn together. Overall, I welcome your views, comments, queries, concerns and inputs – you can reach me at [email protected]. The views expressed in this column are entirely my own and not that of the Office of the Attorney-General.
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