The definition of "fintech" provided by the Financial Stability Board (FSB) has widely become established as standard. The FSB defines fintech as technologically enabled innovation in financial services that could result in new business models, applications, processes or products with an associated material effect on financial markets and institutions and the provision of financial services.

Fintech is thus a very broad concept that encompasses a wide range of technologies. The concept is therefore often narrowed down according to the financial service provided. The use of innovative technologies in the insurance industry, for example, is referred to as insurtech, which is a portmanteau of the words “insurance” and “technology”.

A further fintech area is regtech, derived from the words “regulatory” and “technology”. The focus of regtech is on fulfilling and documenting regulatory and supervisory requirements in a more effective and efficient way.

Another area is suptech, which is derived from the words “supervisory technology”. Suptech applications support the work of supervisory authorities and can thus be understood as a counterpart to regtech.

No legal definiton for term "fintech"

There is, however, no legal definition of the term "fintech" as yet. Due to BaFin’s technology neutrality, it is immaterial whether the supervised undertakings use innovative financial technology, and what technology they employ. BaFin is guided by the principle “same business, same risks, same rules”.

BaFin is closely following the digital transformation in the financial industry and aims to provide legal certainty for companies that work with new technologies. Since time to market is a decisive factor for every fintech company and every new enterprise, BaFin aims to communicate with these companies as early on, as efficiently and as transparently as possible.

On these web pages, BaFin wishes to provide a fast and structured introduction and overview of business models, technologies, authorisation requirements and applicable supervisory law, and enable companies to contact BaFin in an uncomplicated but structured way. These pages are intended to serve as a guide and to provide information about the assessments and requirements that BaFin has compiled with regard to individual innovative financial technologies and business models. You will also find relevant specialist information on our website.

Please be aware that the business models presented on the website are purely indicative; this does not represent a conclusive legal assessment by BaFin. Binding assessments can only be issued in individual cases based on the specific individual circumstances.

BIS-FSI Fintech Tree

@ BIS-FSI

1. Enquiries and contact

We have created a fintech contact form for individual enquiries. This serves as a digital first point of contact with BaFin experts. Enquiries regarding authorisation requirements may be forwarded to the competent regional offices of the Deutsche Bundesbank.

2. Fintech business models

Fintech business models are diverse and – depending on their structure – may also require authorisation from BaFin. On the following pages, you can find an overview of the current most frequent business models, alongside supervisory information:

• Automated and signal-based advice and trading systems

• Digital banking/neobanks
• Innovative payment methods
• Insurtech
• Open banking/open finance
• Regtech

• Services and activities relating to DLT, blockchain and crypto assets

3. Innovative financial technologies

New innovative technologies are also driving digital transformation in the financial industry. Big data, artificial intelligence, distributed ledger technologies such as blockchain, and cloud services are just some of the key concepts in this field.

Alongside innovations such as progress in artificial intelligence or distributed ledger technology, there are a range of additional technological fields such as cloud services that, owing to overall technical progress, have long become part of daily operations in the financial market, and that are thus also considered as part of BaFin’s supervision. The following overview is therefore focussed on selected developments that, as a result of their potential to disrupt the financial system, raise new questions with regard to their supervisory or regulatory implications.

• Big data and artificial intelligence
• Cloud computing
• DLT/blockchain
• Quantum computing

4. Further information

5. Frequently asked questions