Is it necessary for Fintech to follow regulations? The straightforward answer is "yes." Any financial services company must follow a number of laws and regulations. FinTechs would find it difficult (if not impossible) to operate widely in the financial services sector without regulation.  

Is fintech a regulated industry?

 For many years, several countries left Fintech's unregulated since regulators were more concerned with traditional banks and banking. Regulations evolved alongside the industry and initially did not apply to the new breed of FinTech's.

This has changed, and fintech in Cameroon are now regulated by major national financial regulators in the majority of countries. Many regulations have been modified to accommodate fintechs.

Fintech regulation is more complicated than that of financial institutions. Fintech's are often significantly smaller in size, yet they are nevertheless subject to the same stringent regulations. They are also likely to operate across many jurisdictions (perhaps from the start)and must adhere to varied legislation in each region or country.

Who regulates fintech companies?

In Cameroon, for example, regulatory compliance for fintechs entails adhering to the CEMAC Banking laws. Furthermore, the Ministry of Finance of CEMAC member states and the COSUMAF are the institutions in charge of CEMAC Fintech legislation.

‍

Four levels of KYC for Fintechs

‍

-     Customers identification Programs

-     Customers due diligence

-     Simplified due diligence

-     Enhanced due diligence

Why is regulation important for fintechs? 

‍

Financial crime regulations have evolved to safeguard financial institutions, their consumers, and the wider economy. KYC regulations are changed on a regular basis to reflect advances in fraudulent and illegal methods.

Fintechs should ensure the same checks and security as big financial institutions wherever they operate, whether in financial services, customer verification, or transaction support.

Protection and compliance are critical, but there are additional reasons for fintechs to follow regulations:

 Regulation fosters trust.

Compliance with regulations helps to develop credibility and confidence for any financial-related organization.

Regulation levels the playing field.

Fair competition is promoted whenorganizations participating in the same field must satisfy the same rules andchallenges.

Fintechs benefit from compliance.

This could include introducing new products and services.

 How do regulations help create a future-proof fintech?

‍

Every company wishes to expand. Compliance with applicable regulations is critical in the financial services sector to permit expansion. The sooner and more thoroughly a company embraces laws, the easier future growth will be.

Specific regulations must be followed in order to expand internationally. Because fintechs are frequently able to operate in multiple nations and jurisdictions from an early stage, they must adhere to a number of regulations. However, there are some similarities between countries.

 Acquiring New licenses.

As fintechs expand, they will frequently require new operating licenses. The transition from an e-money license to a complete banking license, which entails more regulatory scrutiny and compliance requirements, is a regular one.

Implementing New technologies

Expansion into new technology and services will almost certainly necessitate compliance with extra restrictions.

Fintechs are frequently early adopters of digital technologies such as artificial intelligence, machine learning, and cryptocurrency.

Compliance enables fintechs to quickly implement new technology and procedures.

‍

Supports a good user experience.

Getting compliance right is essential for offering a superior customer experience. Customers want robust and secure interactions but also fast and friction-free experiences. A compliant KYC and onboarding process ensures this.

Safety first!

All contractual interactions with our customers, partners, and vendors are managed by our Legal team.

They are the initial point of contact for all internal issues about laws, regulations, and legalese in English and French.

Furthermore, they are well-versed in all aspects of the CEMAC Money Laundering REGULATION, as well as associated regulations in other countries. Furthermore, they assist regulatory advances in the FinTech space.

The Role of Neneng Law Office│ Law firm in Cameroon

‍

Looking for a reputable law firm in Cameroon? Neneng Law Office is the place to go. We are committed to offering our clients with high-quality legal services based on our years of experience and competence.

Whether you need help with IP advisory, Fintech registration, regulatory compliances for fintech, tax, drafting contracts, contract review, negotiation or any other legal concern, our team of qualified lawyers in Cameroon are ready to help you navigate the legal system's complexities.

Client satisfaction is Neneng Law Office's top focus, with customized attention and tailored solutions for every case.

You may rely on our professionalism and deep knowledge of the business and legal framework in Cameroon.

For any of your legal needs, contact Neneng Law Office now.