Financial technology companies, commonly known as “FinTech”, are companies that offer financial services or products designed and/or distributed using processes based on innovative information and communication technologies.
The new uniform law on banking regulations adopted by the WAEMU Council of Ministers on 16 June 2023 introduces numerous modifications and innovations into the said regulations. These include the recognition of FinTech as being amongst the “banking institutions” which are namely: credit institutions, payment institutions, electronic money institutions, bank holding companies, financial services companies and microfinance institutions.
The new law thus bestows on them on an exclusive basis the right to carry out one or more banking operations such as the receipt of funds from the public, credit operations and payment services.
But the other side of the coin, so to speak, is that they are no longer entitled, without prior approval or authorization, to act as FinTech, or create the appearance of such status, in particular by using the term “FinTech” in their commercial name, advertising or, in any way whatsoever, in their activity.
In other words, companies who wish to offer ICT-based financial services or products within the WAEMU space would need double approval, which is no mean feat.
This is why article 32 of the new law leaves it to the BCEAO to determine the specific regulations applicable to FinTech.
All in all, the future of FinTech is in the hands of the BCEAO. One thing’s for sure; nothing will ever be the same again for FinTechs.
