8. Fintech Regulation

Well-established financial regulation is the key to innovation in the financial services industry; and with the emergence of numerous startups in the domain of payment, remittance, open banking, digital currency, there is much more need of formal regulation and oversight for the new participants of the finance industry. Regulatory sandboxes are giving innovators the opportunity to understand the expectations of customers in the financial services sector. Sandbox tests can help also help participants gather valuable regulatory input on design, evaluate strategy and devise potentially safer financial products. This chapter explores the need of regulation for fintech providers and presents a case study on fintech regulation in Malaysia, one of the key hub of Islamic finance.