TY - JOUR
T1 - Governing Fintech and Fintech as Governance
T2 - The Regulatory Sandbox, Riskwashing, and Disruptive Social Classification
AU - Brown, Eric
AU - Piroska, Dóra
N1 - Publisher Copyright:
© 2021 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
PY - 2022
Y1 - 2022
N2 - This article evaluates the sandbox approach as a regulatory answer to the challenges financial technology brings to finance and social relations. Taking fintech as a sociotechnological phenomenon embedded in discourses of solutionism and innovation, we show that the regulatory sandbox accepts these discourses. Instead of containing fintech, the sandbox is designed in a way that advances riskwashing of fintech even if it is disguised as risktaming. Next, we demonstrate fintech’s problematic nature that regulation should control. First, we propose that through its information processing capacity, fintech accelerates the transition from bank-based to market-based finance. Second, we demonstrate that fintech as part of a fintech-financialization apparatus has catallactic and value-extracting governance effects. Third, inserting the fintech-financialization apparatus into Fourcade and Healy’s argument on the social stratification effect of the data-driven economy, we argue that it also has a socially disruptive potential. We critique the regulatory sandbox for being a facilitator to this process and recommend increasing the number and power of veto players and veto points in complex regulatory regimes.
AB - This article evaluates the sandbox approach as a regulatory answer to the challenges financial technology brings to finance and social relations. Taking fintech as a sociotechnological phenomenon embedded in discourses of solutionism and innovation, we show that the regulatory sandbox accepts these discourses. Instead of containing fintech, the sandbox is designed in a way that advances riskwashing of fintech even if it is disguised as risktaming. Next, we demonstrate fintech’s problematic nature that regulation should control. First, we propose that through its information processing capacity, fintech accelerates the transition from bank-based to market-based finance. Second, we demonstrate that fintech as part of a fintech-financialization apparatus has catallactic and value-extracting governance effects. Third, inserting the fintech-financialization apparatus into Fourcade and Healy’s argument on the social stratification effect of the data-driven economy, we argue that it also has a socially disruptive potential. We critique the regulatory sandbox for being a facilitator to this process and recommend increasing the number and power of veto players and veto points in complex regulatory regimes.
KW - Fintech
KW - banking
KW - financialization
KW - governance
KW - regulation
KW - sandbox
UR - http://www.scopus.com/inward/record.url?scp=85104064573&partnerID=8YFLogxK
U2 - 10.1080/13563467.2021.1910645
DO - 10.1080/13563467.2021.1910645
M3 - Article
AN - SCOPUS:85104064573
SN - 1356-3467
VL - 27
SP - 19
EP - 32
JO - New Political Economy
JF - New Political Economy
IS - 1
ER -