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Myanmar’s Fintech Industry Faces Increased Regulatory Pressure

Yangon, Myanmar - The growth of fintechs in Myanmar has been touted as a game-changer for the country’s financial landscape. However, with this growth comes increased scrutiny from regulatory bodies.

According to industry experts, Myanmar’s fintech sector is facing a multitude of challenges, including navigating complex regulations and ensuring compliance with international standards.

Banks and Fintechs: A New Partnership

Historically, the mantra of the fintech industry has been “We are not financial institutions.” However, recent developments suggest that this may be changing. Some fintechs in Myanmar are considering or pursuing bank charters, enabling them to compete more broadly and avoid disparate regulatory requirements.

  • Advantages of Bank Charters: Fintechs with bank charters can offer a wider range of services and products, increasing their competitiveness.
  • Increased Compliance Burden: However, fintechs must also comply with stricter regulations and risk management controls.

Meanwhile, banks in Myanmar are courting fintechs to leverage their disruptive capabilities and meet the demands of tech-savvy consumers.

Regulatory Actions Against Fintechs on the Rise

Recent regulatory actions against fintechs in Myanmar highlight the risks associated with non-compliance. These actions involve fintechs, including household names, and have resulted in reputational damage and financial losses.

  • Consequences of Non-Compliance: Industry experts warn that these actions are a wake-up call for fintechs to prioritize regulatory compliance and ensure they have robust risk management controls in place.
  • Financial Stability Risks: Regulatory bodies are taking steps to address fintech-related concerns, including the Financial Stability Board’s (FSB) report on financial stability implications of fintech firms.

Regulators Take a Closer Look

In 2016, the Office of the Comptroller of the Currency (OCC) published a paper on its “vision for responsible innovation in the federal banking system.” This initiative has opened the door for fintechs to work collaboratively with regulators to develop solutions specific to their product offerings.

The Future of Fintech in Myanmar

As Myanmar’s fintech sector continues to grow, industry experts predict that companies will need to prioritize regulatory compliance and risk management to stay ahead. A compliant company may well be more attractive to consumers, investors, and regulatory organizations alike.

  • Competitive Advantage: Compliance can provide a competitive advantage in the market.
  • Risk Management: Robust risk management controls are essential for mitigating financial stability risks.

To read the full report on the future of fintechs in Myanmar, download “Fintechs and Regulatory Compliance: The Landscape is Rapidly Changing.”