FinTech as a Regulatory Disruptor

FinTech disrupted banking and finance. The increasing use of algorithms transformed markets into networks of data-flows. The traditional vertical integration of services in few incumbent banks gave way to the unbundling of services into networks of vertical markets with multiple niche startup competitors. Not dominated by a few platforms, the FinTech sector is best described in terms of competing and intertwining normative networks: algorithms become vehicles of norms, firms produce technical standards and codes of conduct, they share infrastructure in banking-as-a-service and form alliances to profit from each other’s regulatory licenses. Similarly to platforms, though, these normative networks undermine traditional conceptions of law in terms of private norm production, the growing importance of compliance and ex ante regulation, the automation and delegation of regulation through RegTech algorithms and the increasing proximity of regulators through SupTech and regulatory sandboxes.