Following the interview with the FinTech Association of Hong Kong, we continue our discussion with the leader of FinTech community in Taiwan, Joanna Yang, Chairperson of the FinTech Industry Development Association (FIDA) of Taiwan. Our discussions encompassed an introduction to FIDA, its main objectives, the current state of Taiwan's FinTech industry, and her aspirations for the FinTech industry in Taiwan.
Let's deep dive into the insightful conversation with Joanna. We also invite you to share feedback and raise any topics for further discussion.
Edward: It's a pleasure to meet you again! Thank you for making time for our interview. We hope to offer our audience insights into Taiwan's FinTech sector and FIDA's role therein. Could you please start by introducing FIDA, FinTech Industry Development Association?
Joanna: Good to see you as well! Our vision for FIDA is spreading awareness of the evolution and significance of FinTech in Taiwan. The birth of FIDA can be traced back to the 2016 Singapore FinTech Festival. There, pioneers and players from Taiwan's FinTech sector met and realized that despite the absence of a government-led grand FinTech exhibition in Taiwan, we could establish an independent, non-profit organization. This non-profit organization aims to advocate for Taiwan's FinTech industry and act as a liaison between FinTech enterprises and the government. Thus, in early 2017, we set out to establish the association and named it the "FinTech Industry Development Association of Taiwan," or FIDA for short. The aim of FIDA is also cooperation with similar associations in other countries.
Edward: Besides working with Singapore FinTech Association, with which other countries does FIDA collaborate?
Joanna: During our visit to Singapore, we met members from Australia's FinTech advisory committee, who crafted Australia's FinTech sandbox framework and guidelines. We learned that many Asian countries, recognizing the immense commercial value of FinTech, are actively fostering its growth. This innovative spirit inspires us to lead the charge for financial innovation in Taiwan, catalyzing positive changes in traditional finance.
In addition to our trip to Singapore, several FinTech professionals, teamed up with the Institute for Information Industry of Taiwan, made a visit to the UK. We were inspired by then Prime Minister David Cameron's initiative in FinTech. Mr. Cameron had enlisted a team of serial FinTech entrepreneurs, leveraging their successful experiences in Silicon Valley, to devise policies favorable for FinTech development and to provide essential resources.
As of today, our commitment to fostering global FinTech relationships has led us to form several significant partnerships, including FinTech Association of Hong Kong, Thai Fintech Association, Astana International Financial Center, Singapore FinTech Association, and Sweden's Hub for FinTech.
Edward: In your view, what are the crucial elements for the long-term growth of FinTech?
Joanna: The advancement of FinTech hinges on three pivotal elements: technology, funding, and policy. Taiwan has traditionally been at the forefront of the first generation of FinTech, thanks largely to its thriving consumer finance sector. Taiwan pioneered online banking, credit cards, and online stock trading. Our robust educational system and thriving tech industry support the professional growth of tech talents, so we are solid on the technology front.
However, Taiwan's FinTech sector requires venture capital and clear policies. Currently, venture capital in Taiwan tends to be conservative. Most funds are channeled into pre-IPO companies, predominantly hardware-related and biotech ventures, with lesser investment in software technology startups. Early-stage projects also lack funding. Crucially, there is an absence of policies supporting the growth of venture capital. In contrast, Singapore attracts global venture capitalists with favorable policies, fosters a supportive environment for startups, and provides financial incentives, enhancing the incentives to invest in startups. More than other sectors, the FinTech sector urgently requires clear policies, regulations, and guidelines to avoid potential regulatory pitfalls.
Edward: Over the years, what challenges have you encountered in fostering Taiwan's FinTech industry?
Joanna: Given that the finance industry is strictly regulated, promoting FinTech entails addressing foundational legislative provisions. Our advocacy led to the 2018 establishment of the "Financial Technology Development and Innovative Experimentation Act" or the well-known FinTech Sandbox. However, its impact over the years hasn't been as expected. Moreover, legal amendments in Taiwan are time-consuming and often lag behind the rapid developments in FinTech.
On another note, although Taiwan's regulatory bodies understand the importance of nurturing FinTech, they proceed with utmost caution to ensure financial stability. The communication channels between these regulators and FinTech companies remain limited. As we discussed earlier, clear policies are fundamental to the growth of the FinTech sector, and this remains a primary challenge.
Edward: How does FIDA manage Taiwan's FinTech community?
Joanna: We organize monthly gatherings, inviting FinTech professionals and advocates for in-depth discussions. We also host experts from other countries to share innovative FinTech products and services and engage in policy-related discourse.
However, it's essential to stress that FIDA is positioned as an "Industry Development Association," not just a networking entity. As such, FIDA sets distinct objectives to drive the growth of Taiwan's FinTech sector.
Edward: Could you highlight some accomplishments of FIDA in promoting the FinTech industry?
Joanna: Each year, we set a specific goal. In FIDA's inaugural year, we championed the FinTech Sandbox, leading to the "Financial Technology Development and Innovative Experimentation Act."
We promoted Open Banking, emphasizing that regulatory authorities should understand consumers have the right to own their data and determine how to use the data, rather than financial institutions. To achieve these goals, we host an annual forum, inviting industry experts, regulators, and academia to explore these critical topics.
Lately, our focus is on the digital economy with the goal of integrating FinTech into it. The importance of the digital economy is evident globally, with countries like Chile, New Zealand, and Singapore initiating the 'Digital Economy Partnership Agreement' (DEPA). This new trade agreement encompasses areas such as business and trade facilitation, digital product handling, data issues, business and consumer trust, innovation in the digital economy, and digital inclusivity. We believe that in order to drive the digital economy forward and align with international standards, there's a need to revise regulations concerning individual data protection.
Edward: Do you have any thoughts you'd like to share with everyone?
Joanna: While I was at traditional financial institutions, focusing on consumer finance, I continually pursued innovation. I truly relished the process of creating something from scratch and driving industry transformation with like-minded experts. Taiwan needs more of this innovative spirit; it represents our vitality. Without innovation, decline is inevitable.
FinTech remains an important sector and attracts immense investments globally. Combined with the trends in the digital economy, its value and impact are huge. I urge the government and incumbent financial institutions in Taiwan to recognize and prioritize the development and application of FinTech. We should aim to deliver innovative financial services that better meet consumer needs and enhance efficiency.
Edward: Thank you for the detailed introduction to FIDA's establishment, its objectives, and mission. I appreciate hearing about the advancements made in promoting the FinTech industry over the years, as well as future endeavors. Thanks again for your time. I sincerely hope FIDA achieves great success in integrating the digital economy with FinTech and sets a favorable policy environment for the growth of Taiwan's FinTech sector.
Compiled and edited by Joyce Chang