Financial and Supervisory Technologies
Development of the financial market is the ongoing task of the National Bank of Georgia. As the pace of innovation in the financial sector is growing, bringing both new opportunities and new risks, the financial sector nevertheless remains the most regulated sector of the economy in the world, and its regulation continues to grow. As a result, the modern supervisory framework is quite voluminous, technical and complex, especially for new financial startups. Against this backdrop, an important challenge for financial sector regulators is to encourage innovators with Fintech ideas and to transform these ideas into a sustainable financial model. In response, the National Bank of Georgia develops various supervisory approaches and facilitates the creation of a basic infrastructure for Fintech operations, and that consists of two vectors: the development of financial infrastructure and the supervisory framework.
Examples of infrastructure include open banking, standardized API, a fast payment system, and a digital GEL project. The National Bank of Georgia tries to lead infrastructure projects with maximum involvement of the private sector and operates a public-private partnership scheme.
The National Bank is focused on finding the optimal balance between innovation and risk in regulatory development. A risk-based approach can only be used by a developed supervisor. It has been evolving for years and is a signature of the National Bank of Georgia. The internationally recognized risk-based approach contributes to the high sustainability of the Georgian banking sector.
The National Bank has taken a number of successful steps to support new technologies and develop the Fintech ecosystem. Fintech infrastructure projects include standardized open banking, instant payments, and digital GEL. The Digital Bank serves to reduce fixed costs for Fintech companies. The National Bank of Georgia uses an open regulatory framework that allows Fintech innovators to participate in the development of the supervisory framework. See the Open Regulatory Framework tools below.