Fintech and Financial Regulation: Current State of Development and Interactions

Research Article
Open access

Fintech and Financial Regulation: Current State of Development and Interactions

Haodong Bian 1*
  • 1 Business School, Soochow University, Suzhou, China    
  • *corresponding author 2210410032@stu.suda.edu.cn
AEMPS Vol.191
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-189-1
ISBN (Online): 978-1-80590-190-7

Abstract

The rapid rise of financial technology(fintech) is changing the traditional financial landscape and bringing new challenges while leading to financial innovation. Financial regulation faces the contradiction between tradition and innovation and needs to find a balance between development and risk. This paper combs through the core technology of fintech and analyzes its impact on traditional finance. Secondly, it explores the dilemma of the current regulatory framework, examines innovative models such as sandbox regulation, and summarizes the global experience of differentiated regulation. Next, this paper explores the mutual dual impact between fintech and financial regulation. Finally, this paper puts forward the future direction of regulation, emphasizing preventive regulation and technology-enabled regulation. This paper hopes that by deeply analyzing the dynamic relationship between fintech and regulation, exploring to understand the regulatory model that adapts to the development of fintech, providing ideas for building an agile and robust regulatory ecology and promoting the healthy development of the financial industry.

Keywords:

Fintech, Financial Regulation, Suptech

Bian,H. (2025). Fintech and Financial Regulation: Current State of Development and Interactions. Advances in Economics, Management and Political Sciences,191,40-46.
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References

[1]. Ni, Q., Zhang, L., & Wu, C. (2023). Fintech and commercial bank risks–The moderating effect of financial regulation. Finance Research Letters, 58, 104536.

[2]. Murinde, V., Rizopoulos, E., & Zachariadis, M. (2022). The impact of the FinTech revolution on the future of banking: Opportunities and risks. International Review of Financial Analysis, 81, 102103.

[3]. Allen, H. J. (2024). Regulating fintech: A harm focused approach. Computer Law & Security Review, 52, 105910.

[4]. Wang, C.-N., Nhieu, N.-L., & Liu, W.-L. (2024). Unveiling the landscape of Fintech in ASEAN: assessing development, regulations, and economic implications by decision-making approach. Humanities and Social Sciences Communications, 11(100).

[5]. Xu, Y., & Bao, H. (2023). FinTech regulation: Evolutionary game model, numerical simulation, and recommendations. Expert Systems With Applications, 211, 118327.

[6]. Boot, A., Hoffmann, P., Laeven, L., & Ratnovski, L. (2021). Fintech: What’s old, what’s new? Journal of Financial Stability, 53, 100836.

[7]. Wang, Y., Xiuping, S., & Zhang, Q. (2021). Can fintech improve the efficiency of commercial banks? —An analysis based on big data. Research in International Business and Finance, 55, 101338.

[8]. Lee, I., & Shin, Y. J. (2018). Fintech: Ecosystem, business models, investment decisions, and challenges. Business Horizons, 61(3), 35–46.

[9]. Chen, M. A., Wu, Q., & Yang, B. (2019). How valuable is FinTech innovation? The Review of Financial Studies, 32(5), 2062–2098.

[10]. Bollaert, H., Lopez-de-Silanes, F., & Schwienbacher, A. (2021). Fintech and access to finance. Journal of Corporate Finance, 68, 101941.

[11]. Wang, D. P., Liu, Y. J. Z., Xu, Y. X., & Liu, L. L. (2022). FinTech, Macro-Prudential Supervision, and Systemic Risk of China's Banking Sector. Finance & Trade Economics, 43(4), 71–85.

[12]. Allen, F., Goldstein, I., & Jagtiani, J. (2018). The interplay among financial regulations, resilience, and growth. Journal of Financial Services Research, 53(1–2), 141–162.

[13]. Wang, Q., & Hu, C. (2023). Fintech, financial regulation and corporate financialization: Evidence from China. Finance Research Letters, 58, 104378.

[14]. Xiao, Y., & Li, B. (2024). Main Characteristics of the Evolution of the Global Financial Regulatory System and Their Implications. Northeast Asia Forum, 2024(1), 174–180.

[15]. Qi, K. (2022). U.S. "Long-Arm Jurisdiction" and Global Economic Governance.Northeast Asia Forum, 2022(4), 64–78.

[16]. Tan, W., Tang, Q., Sun, W., & Du, X. (2025). Unintended consequences: Examining the effects of government digital regulation on corporate fintech innovation in China. Emerging Markets Review, 64, 101221.

[17]. Gambacorta, L., Huang, Y., Li, Z., Qiu, H., & Chen, S. (2023). Data versus Collateral. Review of Finance, 27(2), 369–398.

[18]. Liu, S., Wang, B., & Zhang, Q. (2024). Fintech regulation and bank liquidity creation: Evidence from China. Pacific-Basin Finance Journal, 84, 102276.

[19]. Cornelli, G., Doerr, S., Gambacorta, L., & Merrouche, O. (2023). Regulatory sandboxes and Fintech funding: Evidence from the UK. Review of Finance, 28(1), 203–233.

[20]. Langley, P., & Leyshon, A. (2023). FinTech platform regulation: regulating with/against platforms in the UK and China. Cambridge Journal of Regions, Economy and Society, 16(2), 257–268.

[21]. Gopal, M., & Schnabl, P. (2022). The rise of finance companies and FinTech lenders in small business lending. Review of Financial Studies, 35(11), 4859–4901.

[22]. Ding, N., Gu, L., & Peng, Y. (2022). Fintech, financial constraints and innovation: Evidence from China. Journal of Corporate Finance, 73, 102194.

Cite this article

Bian,H. (2025). Fintech and Financial Regulation: Current State of Development and Interactions. Advances in Economics, Management and Political Sciences,191,40-46.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of ICEMGD 2025 Symposium: The 4th International Conference on Applied Economics and Policy Studies

ISBN：978-1-80590-189-1(Print) / 978-1-80590-190-7(Online)
Editor：Florian Marcel Nuţă , Xuezheng Qin
Conference website: https://www.icemgd.org/
Conference date: 20 September 2025
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.191
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Ni, Q., Zhang, L., & Wu, C. (2023). Fintech and commercial bank risks–The moderating effect of financial regulation. Finance Research Letters, 58, 104536.

[2]. Murinde, V., Rizopoulos, E., & Zachariadis, M. (2022). The impact of the FinTech revolution on the future of banking: Opportunities and risks. International Review of Financial Analysis, 81, 102103.

[3]. Allen, H. J. (2024). Regulating fintech: A harm focused approach. Computer Law & Security Review, 52, 105910.

[4]. Wang, C.-N., Nhieu, N.-L., & Liu, W.-L. (2024). Unveiling the landscape of Fintech in ASEAN: assessing development, regulations, and economic implications by decision-making approach. Humanities and Social Sciences Communications, 11(100).

[5]. Xu, Y., & Bao, H. (2023). FinTech regulation: Evolutionary game model, numerical simulation, and recommendations. Expert Systems With Applications, 211, 118327.

[6]. Boot, A., Hoffmann, P., Laeven, L., & Ratnovski, L. (2021). Fintech: What’s old, what’s new? Journal of Financial Stability, 53, 100836.

[7]. Wang, Y., Xiuping, S., & Zhang, Q. (2021). Can fintech improve the efficiency of commercial banks? —An analysis based on big data. Research in International Business and Finance, 55, 101338.

[8]. Lee, I., & Shin, Y. J. (2018). Fintech: Ecosystem, business models, investment decisions, and challenges. Business Horizons, 61(3), 35–46.

[9]. Chen, M. A., Wu, Q., & Yang, B. (2019). How valuable is FinTech innovation? The Review of Financial Studies, 32(5), 2062–2098.

[10]. Bollaert, H., Lopez-de-Silanes, F., & Schwienbacher, A. (2021). Fintech and access to finance. Journal of Corporate Finance, 68, 101941.

[11]. Wang, D. P., Liu, Y. J. Z., Xu, Y. X., & Liu, L. L. (2022). FinTech, Macro-Prudential Supervision, and Systemic Risk of China's Banking Sector. Finance & Trade Economics, 43(4), 71–85.

[12]. Allen, F., Goldstein, I., & Jagtiani, J. (2018). The interplay among financial regulations, resilience, and growth. Journal of Financial Services Research, 53(1–2), 141–162.

[13]. Wang, Q., & Hu, C. (2023). Fintech, financial regulation and corporate financialization: Evidence from China. Finance Research Letters, 58, 104378.

[14]. Xiao, Y., & Li, B. (2024). Main Characteristics of the Evolution of the Global Financial Regulatory System and Their Implications. Northeast Asia Forum, 2024(1), 174–180.

[15]. Qi, K. (2022). U.S. "Long-Arm Jurisdiction" and Global Economic Governance.Northeast Asia Forum, 2022(4), 64–78.

[16]. Tan, W., Tang, Q., Sun, W., & Du, X. (2025). Unintended consequences: Examining the effects of government digital regulation on corporate fintech innovation in China. Emerging Markets Review, 64, 101221.

[17]. Gambacorta, L., Huang, Y., Li, Z., Qiu, H., & Chen, S. (2023). Data versus Collateral. Review of Finance, 27(2), 369–398.

[18]. Liu, S., Wang, B., & Zhang, Q. (2024). Fintech regulation and bank liquidity creation: Evidence from China. Pacific-Basin Finance Journal, 84, 102276.

[19]. Cornelli, G., Doerr, S., Gambacorta, L., & Merrouche, O. (2023). Regulatory sandboxes and Fintech funding: Evidence from the UK. Review of Finance, 28(1), 203–233.

[20]. Langley, P., & Leyshon, A. (2023). FinTech platform regulation: regulating with/against platforms in the UK and China. Cambridge Journal of Regions, Economy and Society, 16(2), 257–268.

[21]. Gopal, M., & Schnabl, P. (2022). The rise of finance companies and FinTech lenders in small business lending. Review of Financial Studies, 35(11), 4859–4901.

[22]. Ding, N., Gu, L., & Peng, Y. (2022). Fintech, financial constraints and innovation: Evidence from China. Journal of Corporate Finance, 73, 102194.

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