Financial technology (fintech) is a rapidly growing financial industry segment facing various regulatory approaches. Existing rules and regulations tailored for traditional deposit-taking institutions, such as banks, are not directly applicable to fintech, which creates opportunities for regulatory arbitrage. This situation often increases interest rates for small and informal sector borrowers.

The success of fintech business models relies heavily on cross-border data portability and the interoperability of digital systems. This policy brief outlines potential guidelines for the G20 to consider when crafting a declaration on emerging technologies. It highlights the importance of ensuring ‘secure’ data portability and ‘trustworthy’ interoperable solutions. Incorporating both aspects into the guidelines would boost the regulatory framework for fintech, especially in advancing digital public infrastructure (DPI) across various sectors such as health, payments, education, trade, agriculture, governance, and service delivery. These guidelines would support the broader adoption of fintech-driven solutions by addressing technical barriers and fostering innovation.

The proposed G20 Guidelines would complement initiatives such as the G20 Global DPI Repository (GDPIR). Under the South African presidency, the G20 Digital Economy Working Group has focused on trusted data exchange, digital identity, digital financial payments, and interoperability across infrastructures, services, and applications.

Key considerations for the guidelines include (i) achieving alignment and clarity at the G20 level on the description, ownership, and use of data and data interfaces; (ii) fostering agreements to ensure consistent engagement and collaboration to augment safety and cyber security integration; (iii) establishing standards to ensure supplier/vendor neutrality on interoperable platforms; and (iv) promoting secure and consent-based data-sharing frameworks modelled after the Data Empowerment and Protection Architecture (DEPA) to accelerate digital and financial inclusion using locally appropriate technologies. These measures would collectively strengthen the regulatory environment for fintech while supporting its potential to drive inclusive and innovative digital transformation.