A Guide to Financial Regulation for Fintech Entrepreneurs

CHAPTER 5Retail Financial Services Products

Already today the variety of the business models in financial services means that economically very similar products are offered by a wide range of players, and the emergence of Fintech players with new and often ultra‐focused business models will further exacerbate that issue. Traditionally, regulation has been defined on the basis of the business model—you are a bank, hence we apply bank regulation. This gets more and more difficult, and whilst legislation often is a bit slow to adapt, regulators in practice already often employ duck typing methods on a product level—your product looks like a duck, and it sounds like a duck, therefore we regulate it like a duck. So after having discussed the structure of the financial services segment in the previous chapter, I now focus on the products and services offered, and give some indication of how they are regulated.

Because of its sheer length I have broken down this topic into two chapters: one for products typically offered to retail and small business customers, and another one for products typically offered for wholesale customers. This is not entirely clean, as there are a number of products that are offered to the entire customer base—say, payment accounts. Those are either discussed in the chapter where it makes more sense, or in both if the product has significant different features in those segments. The product segments we'll be looking at in this chapter are (see also Figure ...