The Central Bank of Cyprus (CBC) announced the operation of an Innovation Hub in a bid to promote and support domestic financial innovation.
A press release issued by the CBC says that the Innovation Hub aims to become an official platform for communication between the Supervisory/Regulatory Authority and businesses or even startups active in Financial Technology (Fintech) sectors, that is, combining innovative technology with financial services.
Stakeholders’ access to the Innovation Hub will be based on pre-established objective criteria, the press release said, noting the CBC shall provide non-binding guidance on requests, including the provision of information and guidance on actions required for the licensing of innovative Fintech products or services.
In this way, the CBC initiates a continuous and productive dialogue with financial service providers for the implementation of innovative ideas and the adoption of new technologies, making it easier for them to become aware of their regulatory obligations within the financial system.
In addition, CBC added it contributes to fostering a dynamic environment for the development of innovative companies and technologies, by monitoring and encouraging initiatives based on the development of Fintech, guided by the safe and smooth functioning of the financial sector.
The operation of the Innovation Hub simultaneously enhances the knowledge of the Central Bank of Cyprus for the ex-ante regulation and prudential supervision of new and innovative financial activities, as well as the early identification of risks that may affect companies and the financial system of the country.
In a statement the CBC Governor, Constantinos Herodotou, said that the domestic economy is increasingly entering an environment where technology allows the implementation of innovative business models and services.
“Any change can open up new horizons for a company, but at the same time exposes it to new risks, which need to be addressed effectively with new knowledge as a weapon,” Herodotou added, noting the Innovation Hub is a crucial step in the broader context of the supervisory objectives and priorities of the CBC, addressing innovation, digital business resilience, digital transformation and cybersecurity.
“By maintaining an open channel of communication and feedback with the fast-growing Fintech industry, the CBC seeks and looks forward to better protection of the financial system through an understanding of new risks, but also to reaping the full benefits of these activities,” Herodotou concluded.
Source: Cyprus News Agency