Central Bank of Cyprus to support fintech companies
The Central Bank of Cyprus (CBC) has launched an Innovation Hub in financial technology (fintech), to encourage and support domestic financial innovation, according to the Cyprus Mail.
As stated by the central bank, the Innovation Hub seeks to be an official communication platform between the supervisory and regulatory authorities and businesses or startups active in the financial technology sector, where their business combines innovative technological elements with financial services. Furthermore, the central bank clarified that access to the Innovation Hub for all interested parties will be based on predetermined objective criteria.
The CBC will provide non-binding guidance to enquiries, including providing information and guidance on actions required to license innovative fintech products or services. By doing this, the official announcement explained, the Central Bank can initiate a continuous and productive dialogue with financial service providers for the implementation of innovative ideas and the introduction of new technologies, so that they can stay on top of any regulatory obligations within the Cypriot financial sector . system.
According to the central bank, the new innovation hub will reportedly help cultivate a dynamic environment for the development of innovative companies and technologies, monitor and encourage initiatives based on the development of financial technology, with a view to the safe and smooth operation of the financial sector, Cyprus Mail reports.
Furthermore, the bank believes that the Innovation Hub will also strengthen the knowledge of the central bank for proactive regulation and supervision of new innovative financial activities. The initiative will also enable the CBC to identify any risks that may affect companies, as well as the country’s financial system, in a timely manner, Cyprus Mail continues.
The expected effects of the Innovation Hub
According to the governor of the central bank, the domestic economy is entering an environment where technology allows the implementation of innovative business models and services. He also noted that each change can open up new opportunities for a company. But the CBC’s governor also warned that at the same time the new roads and canals could also expose companies to new risks, which must be effectively countered with the necessary and most up-to-date knowledge.
Last but not least, the central bank added that by maintaining an open channel for communication and feedback with the fast-growing fintech industry, the central bank seeks and looks forward to better protection of the financial system through understanding new risks, but also making full use of the various the benefits resulting from such activities.
