Copenhagen Fintech Christmas Calendar #22: The role of the Regulator — meet the Danish FSA
In our 22nd podcast episode, live from the Singapore Fintech Festival, Simon Simon Schou, Head of Innovation at Copenhagen Fintech, meets the Danish Financial Supervisory Authority (FSA) and talks to their Director-General Jesper Berg about the role of emerging fintech solution in the overall financial system. Jesper Berg has an impressive financial services-CV. Among other things, he previously worked at the Danish Central Bank as well as the European Central Bank.
With Jesper, he discusses how the many new tech solutions popping up are influencing overall financial stability and how the Danish Regulator combines regulating with facilitating innovation.
About Jesper Berg
Jesper has been heading the Danish FSA for four years now. Before that, he spent 25 years in central banks including the International Monetary Fund, European, and Danish Central Bank. He also worked at Nykredit for 5 years.
About Simon Schou
Simon, Head of Innovation at Copenhagen Fintech, has a background as an innovation consultant in a variety of industries and the financial service union. Being responsible for establishing and strengthening an ecosystem for financial innovations in Denmark, he has established the fundament of what we now understand as Copenhagen Fintech.
Jesper, what is your take on fintech?
Technology has been an important factor for change for decades now. Plus, banking has become very difficult due to the current interest environment. Therefore, fintech has become especially interesting in recent years. Right now, banks are experiencing a lot of competition from big data and fintech companies.
What is the FSA?
The Danish FSA regulates banking, credit, pension, insurance, financial markets, AML, and fintech. Having this comprehensive range of competences allows us to gain a broader and deeper understanding of the synergies prevalent in the financial sector.
How does the FSA get to know fintechs startups?
Most times, startups will contact the FSA to find out which regulations they would need to take into consideration. However, it can often be difficult to figure out which kind of regulation actually applies to new business models.
Because of the high numbers of new fintech startups, the FSA has opened a sandbox environment for them. On the one hand, this Sandbox helps the FSA to be up to date with the latest technologies and trends. On the other hand, it also helps the startups as the FSA has a lot of experience and input.
Is the FSA able to react fast enough to the rapidly changing financial sector?
The financial sector is heavily regulated which means that things take time. Yet, we are relatively fast in reacting to change. For us, the most important thing is to build trust. So this is our priority.
How does fintech contribute to the fight against financial scandals?
Fintech is particularly important for the field of AML and KYC. Here emerging technologies have made a real difference since a lot of the processes in AML and KYC run much better with technology.
Why is the FSA at the Singapore Fintech Festival?
The FSA has sent a delegation to guide companies who want to establish themselves in Denmark. But personally, I am here to learn.
What do you see as the biggest challenges?
In the banking world, the use of data is very restrictive. Simultaneously, and very much contrary to how we handle data in the financial sector, the world of technology builds on the liberal use of data. I am sure that in the future:
We will see these two worlds collide — this is going to be both a huge challenge but also a huge opportunity for the financial sector.
Does fintech matter and why?
Technology can make a lot of processes easier and we have seen a huge contribution from the fintech sector. However, we have to keep in mind that it can be very hard to regulate.