In ‘Russel & Partners’ we advise a range of clients on their fintech products and underlying service regulations in diverse areas such as financial regulation, anti-money laundering, privacy, data transfer, remittance services, payment settlement regulations, licensing and blockchain accounting etc. 

Fintech is a booming industry, especially between the investors.

The term ‘FinTech’ is used for new technologies for financial services to automate & improve their services. It encompassed a rapid growth to this financial industry services & processes. From mobile banking and insurance to cryptocurrency and investment apps, fintech has a seemingly endless array of applications. Banks are not only financial institutions that have made tech-driven changes, but also the digital loans, ecommerce, mobile stock services, digital currency exchanges, online payment services etc.

Fin-Tech Companies:

Fintech companies integrate technologies (like AI, blockchain and data science) into traditional financial sectors to make them safer, faster and more efficient. Fintech is one of the fastest-growing tech sectors, with companies innovating in almost every area of finance; from payments and loans to credit scoring and stock trading. Such as everything from a consumer’s ability to go online and watch over financial transactions through any electronic device/software/application which allows paying the seller by tools that allow financial institutions to make quick lending decisions, these are all part of the evolution of financial services. The ability for investors to do their own research, choosing stocks and see portfolios and performance in real time is also an example of FinTech in action.

FinTech in Bangladesh:

FinTech in Bangladesh is a fine example of a public-private partnership targeting double-digit growth. Bangladesh’s innovative FinTech approach is based on Mobile Financial Services (MFS). MFS refers to branchless banking or mobile banking services offered to banked and unbanked population groups at reasonable rates. Using MFS, consumers in remote locations can add money to their mobile accounts at nominal charges without visiting a physical branch. MFS are registering steady growth in the country. 

Though Bangladesh FinTech are still lagging behind than global. Yet Bangladesh was introduced by ‘‘bKash” (Brac bank) to use the most popularly used FinTech mechanism. Then mCash (Islami Bank Bangladesh), UCash, Islamic Wallet (Al-Arafah Islami Bank), TAP (Trust Axiata Pay, (DBL) Dhaka Bank Ltd. Upay (UCB Bank), Nagad (Bangladesh Post Office) and Rocket (Dutch-Bangla Bank) has introduced diversified services and uninterrupted mobile banking facilities. Also foreign stock trading on a CFD basis via Apps and other portable platforms along with other related matters. So far, In Bangladesh, licenses has been granted to 16 leading banks to offer MFS. 

Digital Financial Services (DFS) Lab, a joint initiative by Bangladesh Bank and a2i, has also been developed to help foster growth of the industry.

In Bangladesh some day-to-day used fintech upon which we rely on daily life based are, such as — Mobile Banking, cryptocurrency, Investment, trade, Insurance, payment services, Machine learning, Lending etc.  

As fintech has grown, so have concerns regarding cybersecurity in the fintech industry. The massive growth of fintech companies and marketplaces on a global scale has led to increased exposure of vulnerabilities in fintech infrastructure, while making it a target for cybercriminal attacks. 

Laws governing Fin-Tech:

The legal system also has a role to play in this financial arena. Customers who lose money need to know exactly where their legal rights lie. 

• The Central bank of Bangladesh “The Bangladesh Bank” issued MFS guidelines and permitted 28 banks to provide mobile finance under a bank-led structure to boost financial inclusion. The Bangladesh Bank, has recently introduced a regulatory innovation office for Fin-Techs under its payment systems department. 

• Taking into account the National ICT Policy 2018, the Information and Communication Technology Division of Bangladesh is working on implementing an Interoperable Digital Transaction Platform (IDTP) to offer Application Programming Interfaces (APIs) to Fin-Techs along with National Board of Revenue (NBR), Bangladesh Securities and Exchange Commission (BSEC). Such as —Bangladesh Bank considers bitcoin and other cryptocurrencies as illegal under the Foreign Exchange Regulation Act 1947, and the Money Laundering Prevention Act 2012. Bangladesh is one of the few countries in the world that consider bitcoin and all other types of cryptocurrencies as “hostile”. But much debate arised as the central bank never correctly defined bitcoin currency. The Digital Security Act of 2018 are also used in this area of work.