Why is regulation important for Fintechs?
Regulations have evolved to protect financial institutions, their customers, and the wider economy from financial crime. Anti-Money Laundering (AML) and Know Your Customer (KYC) regulation are frequently updated to reflect changes in fraudulent and criminal methods.
Wherever Fintechs operate – whether in financial services, customer verification, or transactions support – they should ensure the same checks and security as the major financial institutions.
Protection and compliance are vital – but there are other reasons For Fintechs to comply with regulation:
- Regulation establishes trust: Credibility and trust are vital for any financial-related company, and compliance with regulations helps to establish this.
- Regulation creates a level playing field: When companies operating in the same arena must meet the same requirements and challenges, this supports fair competition.
- Compliance helps Fintechs scale: This could include offering new products and services, moving to a full banking license, or expanding into new countries.
Who regulates Fintech companies?
Fintech companies operate in a regulated environment to ensure stability, security, and consumer protection. The regulatory landscape is complex and varies across jurisdictions. Various governmental and non-governmental bodies oversee Fintech firms to ensure compliance with financial regulations, consumer protection laws, and data privacy standards.
Regulatory body in Rwanda
Fintech companies are regulated by the Central Bank of Rwanda. https://www.bnr.rw/paymentsystem
