To be sure, Taiwan's fintech roadmap is a step in the right direction. With its easing of restrictions on consumer data sharing, it could help pave the way for Taiwan to introduce open banking. From 2021, the subsidiaries of financial holding companies will be allowed to share consumer data with each other with the consent of customers. Taiwan's largest lenders are structured as financial holding companies with subsidiaries in banking, insurance, securities and other segments of the financial sector.
From the FSC's standpoint - at least at this stage - the main reason to permit consumer data sharing among financial institutions is to boost risk management capabilities, not to facilitate greater consumer choice in retail banking. Brenda Hu, deputy director of the FSC's Department of Planning, said at a September press conference that consumer data sharing could help financial institutions evaluate the risks of doing business with new clients. She suggested that they consider developing uniform risk management models and accompanying databases that can be used across all subsidiaries.
In 2022-23, the FSC may broaden the scope of consumer data sharing to fintech startups, telecoms and e-commerce companies.
Meanwhile, the FSC also plans to introduce a fintech license by 2022 that it says will help Taiwan develop a stronger fintech talent pool. “Some talent in the technology field are interested in changing careers and transferring to the financial industry, but they do not know how to do that. If they pass the exam and obtain a license, it could be their ticket” to a career in financial services, Hu said.
If Taiwan's goal is to slowly "professionalize" fintech, while drawing on its engineering talent to improve the digital agility of incumbent banks, then introducing a fintech license may be helpful. But it may also create additional layers of red tape in a financial sector already constrained by tight regulations.
Per the FSC's estimates, Taiwan's financial institutions plan to invest NT$18.9 billion (US$639.7 million) in fintech this year, up 14% year-on-year. Banks account for about NT$12 billion of the fintech investment.