FinTech and Financial Regulation: Main Regulatory Issues and Proposals for an Optimal Regulation of the Phenomenon

FinTech – the application of technology to financial services resulting in innovations in processes, services or products – currently attracts the attention of national and international regulators (extending existing laws or adopting special regulations or sand-boxes) as well as of the academia. This phenomenon, in fact, has not only been revolutionizing the way financial services are offered but has also challenged the current approach in financial regulation and supervision. Such innovations have allowed activities which are difficult to qualify under traditional legal categories and, therefore, have often escaped current regulations. Furthermore, they place themselves in grey areas, across different sectors and countries, with the effect of, either, being subject to multiples regimes or, on the contrary, of escaping regulation in «no man’s land» territories. The present paper aims at, firstly, describing the main legal issues in regulating FinTech, providing varied specific examples and, secondly, providing principles for an optimal regulation of such new phenomenon, in the framework of a general rethinking of the current approach in financial regulation, toward a more proportional, tiered, functional and cross-sectoral model. Finally, I will apply such principles to the analysis and evaluation of the Proposal for a Regulation on European Crowdfunding Services Providers for businesses, currently in the process of being approved.