Micro-Operating Mechanism Approach for Regulatory Sandbox Policy Focused on Fintech

Abstract

To determine the micro-operating mechanism(MoM) of enterprises participating in the regulatory sandbox policy in fintech, this study analyzes the structure of enterprise innovation competencies and derives relevant implications. The results reveal that large, middle-standing, and small and medium-sized enterprises focus on security, infrastructure, and user-related technology development, respectively, to enhance their innovation competencies. The security-related issues considered by large enterprises entail relatively high costs in initial technology development and are closely related to infrastructure building. Large enterprises are focused on developing overall security-related technologies, whereas middle-standing enterprises are striving to develop infrastructure-related technologies, with particular emphasis on elementary technologies. Small and medium-sized enterprises are also making efforts to develop user-centered technologies that can directly be used in fintech. As a method to implement regulatory sandboxes tailored to the needs of participating enterprises in South Korea, this study will help to determine the MoM of such participants and establish strategies to support them sustainably in terms of evidence-based policy.

Public Finance Policy on Online Loans in Indonesia

“…These policies could benefit people excluded from financial systems worldwide (Joia & Cordeiro, 2021). The security in the initial technology development certainly requires a considerable budget (Choi & Lee, 2020). However, digital-based technologies have been promoted since the beginning for financial markets and modernization, such as tools to strengthen the control of fintech service providers (Wang, 2021).…”

Regulator reputation and the successful governance of innovation

“…Only very recently have studies begun to turn to describing their day-to-day governance, evaluating their success in practice, and seeking to explain what factors underlie successful implementation (for e.g., Alaassar, Mention, and Aas 2020). Evaluating the sandbox in practice reveals that its performative success arises from intense regulator-firm collaboration early in the governance process (Choi and Lee 2020;Butor-Keler and Polasik 2020;Alaassar, Mention, and Aas 2020;2021;van der Waal, Das, and van der Schoor 2020). Through this collaboration, regulators can exert influence over firms and the course of their innovation even in the absence of clear, definitive regulatory rules for a given innovation (Ranchordas 2021a, 10).…”

“…Different sandboxes in different jurisdictions and for different sectors aim to facilitate innovation in different ways, and these differences are reflected in their various designs(Ranchordas 2021b, 9). There has been only limited research, however, analysing sandbox implementation(Choi and Lee 2020;Butor-Keler and Polasik 2020;Alaassar, Mention, and Aas 2020;2021;van der Waal, Das, and van der Schoor 2020). Of these, only three studies specifically examine how well sandboxes facilitate innovation in practice.…”