What is the most appropriate way for financial sector regulators to support the development of an innovative FinTech ecosystem? This topic was discussed at the workshop held last week in the National Bank of the Republic of North Macedonia. The event was organized within technical cooperation with the National Bank of Belgium, in context of current preparation of numerous laws and bylaws in financial area, which should enable better harmonization of our with the European legislation, and consequently, open financial services market for start-up companies from the FinTech sector. In addition to the experts from the two central banks, the workshop was attended by representatives of the Ministry of Finance and the Directorate for Personal Data Protection.
The focus in the discussion was first put on the initiatives taken by financial regulators globally in order to support financial innovation in recent years. These initiatives were directed towards creating an environment of closer cooperation between regulators and current financial institutions and start-ups that intend to introduce technology-innovative financial services (FinTech). As highlighted at the workshop, through closer cooperation with regulators, FinTech has the opportunity to more easily understand regulatory requirements when introducing new innovative financial services on the market. Simultaneously, such an active communication enables the regulators to better understand the innovative financial services which bring certain advantages, as well as risks.
Following these trends, our central bank is in the final stages of opening an Innovation Gateway, which will serve as a communication platform between the innovative business community, i.e. the FinTech sector, the National Bank and other relevant institutions. Following the example of many central banks from developed economies, it is expected that it will facilitate, support and assist the development of innovations in the field of financial services and products for any company wishing to start an innovative business in our economy.
In their presentations during the workshop, experts from the National Bank of Belgium also referred to the fact that in addition to taking initiatives for direct communication with FinTech, financial innovations are increasingly encouraged through changes to the regulatory framework aimed at opening bank systems to FinTech, i.e. towards the open banking concept. This concept is aimed at offering innovative and competitive solutions for regular bank clients. In this context, EU Payment Services Directive 2 is especially relevant, the incorporation of which in our legislation is underway.
The experts also discussed the opportunities and challenges arising from the open banking concept, which is expected to be implemented in our country after the adoption of the new Law on Payment Services and Payment Systems, which was drafted by the National Bank with the Ministry of Finance lately.
At the workshop wrap-up, it was once again noted that technological advancements cause significant changes in the behavior of financial services users, who prefer more innovative digital financial services. At the same time, technological advancements create a new milieu of better interconnection between different types of financial services providers. Regulators can therefore enhance mutual coordination, as well as communication with FinTech by establishing appropriate innovation support centers, within which they would better understand the needs for amending the regulatory framework in order to increase the competitiveness in the financial sector, to ensure greater protection of financial services users and better risk management.
Our central bank is already undertaking activities in this direction.