Bali Fintech Agenda: An insight
By GITTEL AYUK Esq.
ABSTRACT
In 2018, international financial institutions took bold steps to foster international coordination of Fintech, by proposing guidelines that would help to shape both national, regional and international Fintech infrastructure and policies. Their contributions are mirrored in a document known as the Bali Fintech Agenda.
What is the Bali Fintech Agenda (BFA)?
The Bali Fintech Agenda is a document which was jointly issued by the International Monetary Fund (IMF) and the World Bank on the 11th of October 2018. This document contains 12 policy aspirations which together assembles and suggest vital concerns for policymakers and the international community to guide individual countries in the making of their Fintech Policies[1]. The Agenda, was inspired by the desire to broker a middle ground between the innovative financial solutions which Fintech offers on the one hand, and the various risks it comes with, especially on financial stability and integrity.[2] It recommends an architecture “for the consideration of high-level issues by individual member countries, including in their own domestic policy discussions”.[3]
[1] The Bali Fintech Agenda, October 11, 2018, Available at, The Bali Fintech Agenda (imf.org).
A Resume of the 12 Aspirations
- Embrace the promise of Fintech
- Enable New Technologies to Enhance Financial Service Provision
- Reinforce Competition and Commitment to Open, Free, and Contestable Markets
- Foster Fintech to Promote Financial Inclusion and Develop Financial Markets
- Monitor Developments Closely to Deepen Understanding of Evolving Financial Systems
- Adapt Regulatory Framework and Supervisory Practices for Orderly Development and Stability of the Financial System
- Safeguard the Integrity of Financial Systems
- Modernize Legal Frameworks to Provide an Enabling Legal Landscape
- Ensure the Stability of Domestic Monetary and Financial Systems
- Develop Robust Financial and Data Infrastructure to Sustain Fintech Benefits
- Encourage International Cooperation and Information-Sharing
- Enhance Collective Surveillance of the International Monetary and Financial System
What this Means for African Countries?
Africa has been a hub for Fintech expansion in the world with an exponential growth rate of new Fintech start-ups daily, and thus, regulation becomes a major concern. Some African countries have even resorted to regulatory sandboxes to mitigate the regulatory vacuum in new spheres of Fintech. The BFA therefore comes in handy, to assist in the efforts of regulating Fintech in Africa. Worthy of note is that, the target countries of the BFA are; low-income economies, Small states and underserved Countries.
Most African Countries fall under this classification and would therefore be first hand beneficiaries of the agenda. Through the Bali guidelines, African States can make better policies on Fintech taking into consideration their respective domestic realties, balancing the obvious benefits of Fintech with the eminent risks it brings. Good Policies mean good business environment for Fintech Start-ups where their rights can be guaranteed, where they could be held accountable and where they could collectively contribute to the transformation of the economic and financial sphere of the Continent.
Conclusion
The BFA forms part of the building blocks of a global framework for Fintech regulation. Although they are just aspirations, they have a strong persuasive and advisory value, as they would guide nations in the making of their respective Fintech Policies. Just like other low-income economies, small states and undeserved countries, the continent of Africa stands to benefit in great measures from the agenda through Fintech Policy orientation and guidelines.