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Fintech
The word FinTech is a short form of the phrase “Financial Technology” as a collective term embracing the practical application of technological innovations to the provision of various financial services such as payment services, banking, investment services or insurance. These technologies enable the development of new business models, applications, processes or products, as well as enhancements in currently provided products or services which make them more accessible and individualised while reducing their costs.
The Innovation Hub and its rules of operation
- Why has NBS established an Innovation Hub?
- What is FinTech?
- What the innovation hub is
- What the innovation hub is not
- How to proceed if I am interested in implementing innovations in my business
- Innovation facilitators in the EU
- FinTech glossary
Why has NBS established an Innovation Hub?
Companies operating in the area of financial innovation report that complicated regulatory requirements and their unclear application to innovative financial products or services are obstructing the development of their business. NBS has therefore established the Innovation Hub as a means to enter into dialogue with the FinTech sector and present the bank’s opinions on questions submitted by interested persons within NBS’s competence. In this way, NBS supports the developments of modern technologies in the financial market in a manner that improves the safe and sound functioning of the financial market with the aim of ensuring its credibility and the protection of financial consumers and other financial market counterparties. Through the Innovation Hub, NBS also keeps in touch with developments in the market with the aim of supporting the improvement of its operation rules.
What is FinTech?
We see financial innovation as a new technology-based approach in the area of finance which may lead to the emergence of a new business model, a solution, process or product with practical applications that could have a significant impact on financial markets, institutions and the provision of financial services. A company that applies financial innovation in its activities is FinTech.
What the innovation hub is
Thanks to the Innovation Hub, interested persons with a realistic business plan in the FinTech area as well as established financial market entities may enter into a dialogue with NBS experts from various areas who will help them understand and properly implement the fine details of financial market regulation. To establish communication, a contact form is used which provides NBS with a basic overview of the plan of the person interested in FinTech.
In addition to delivering an added value service for the private sector, the initiative should enhance NBS’s understanding of the dynamic developments in the FinTech area so as to be able to improve the rules for operating on the financial market with the aim of adjusting them to modern trends..
A precondition for an initiative to be dealt with through the NBS Innovation Hub is its distinctness and innovation, uncertainty of the existing regulatory framework, benefits to consumers and the Slovak financial market. For detailed evaluation criteria for including an initiative in the NBS Innovation Hub click here:
Evaluation criteria
| NBS evaluation criteria | Key questions1 | Positive indicators2 | Negative indicators3 |
|---|---|---|---|
| Distinctness and innovation | Is the intended service or activity distinct from the offers of other financial market participants in Slovakia and does it contain any financial innovation features? | The initial analysis identified few or no comparable services or activities in the Slovak financial market. The intended service or activity represents a new technology-based approach in the area of finance which may lead to the establishment of a new business model, a solution, process or product applicable in practice with a significant impact on financial markets, institutions and the provision of financial services in Slovakia. | Several similar activities or services are available in the Slovak financial market. Artificially provided distinction of a service or activity. The intended activity or service does not have any financial innovation features. |
| Knowledge of the applicable regulatory framework | Was the applicant’s effort sufficient to understand the regulatory framework relating to the intended activity or service? | The applicant has demonstrably analysed the compliance of the intended activity or service with the existing regulatory framework. | The applicant has not demonstrably analysed the compliance of the intended activity or service with the existing regulatory framework. |
| The need for cooperation with the NBS Innovation Hub | Is the activity or service clearly defined in the existing regulatory framework? Does the question fall within NBS’s competence | The activity or service is not clearly defined in the existing regulatory framework and relates to the regulations within NBS’s competence. | The activity or service is clearly defined in the existing regulatory framework. The applicant cannot formulate what constitutes the uncertainty of the existing regulatory framework. The solution to the initiative does not require the involvement of a supervisory authority; it falls within the scope of services currently provided by financial and legal advisors. The question relates to matters outside NBS’s competence, for example, personal data protection, taxes, etc. |
| Benefits to the consumers and the Slovak financial system | Does the intended service or activity offer identifiable direct or indirect benefits to the consumers, or does it reduce risks in the Slovak financial system? | The intended service or activity improves position of the consumers through, for example, lower price or higher quality. The applicant has analysed the risks related to the intended service or activity in respect of the consumers and the Slovak financial system and has proposed measures to mitigate them. The intended service or activity will make the Slovak financial system more competitive. | The innovation is likely to have adverse effects on the consumers or the Slovak financial system. The intended service or activity includes features aimed at regulatory arbitrage. |
1) The applicant will give answers to the questions in the contact form.
2) The initiative will be dealt with in the NBS Innovation Hub if all positive indicators are complied with.
3) The initiative will not be dealt with in the NBS Innovation Hub.
What the innovation hub is not
If NBS issues an opinion through the NBS Innovation Hub, this does not replace proceedings related to authorisation to conduct business (a license). A decision on applications for authorisation to conduct business is issued in specific proceedings in NBS. Information about FinTech published on the NBS website and opinions issued based on a request by means of a contact form do not oblige NBS in any way in potential licensing proceedings, for example, because underlying documents submitted for the purpose of an opinion may be different from those submitted in proceedings.
NBS reserves the right to change its opinion, in particular if the relevant legislation is amended, the NBS analysis is supplemented, or new information is obtained.
The NBS Innovation Hub cannot be used to provide information about matters outside NBS’s competence (for example, personal data protection, taxes, competition law). Opinions on applicants’ plans will be limited to evaluation of the applicability of relevant legislation within NBS’s competence. Issues not falling within NBS’s competence but within the competence of other state administration authorities (Office for Personal Data Protection, Financial Administration) will be dealt with in line with the observed practice, i.e. by referring the applicant to the competent authority.
NBS’s competences are determined by relevant laws which do not delegate the provision of economic and legal advisory services to NBS. The NBS Innovation Hub is not a replacement for professional financial and legal advice.
Performance of activities in the financial market without relevant authorisation justifies the imposition of sanctions by NBS. Under certain circumstances such activities may also constitute a criminal offence.
How to proceed if I am interested in implementing innovations in my business
- Verify if your question falls within the competence of NBS as a financial market supervisory authority.
- If you are not an established financial market entity (a bank, insurance company, etc.), select the business model most closely corresponding to your intended activity.
- Verify if your initiative complies with NBS’s criteria for dealing with issues through the NBS Innovation Hub.
- Contact NBS using the structured form.