FinTech development can bloom in absence of oversight

The lack of regulations governing many areas of FinTech in Russia is providing many great opportunities for FinTech startups to test innovative new solutions that might be difficult to test elsewhere, particularly in the more-regulated West. This is especially true in three areas: peer-to-peer (P2P) lending, collective investments and cryptocurrency.

P2P lending has enormous potential, especially if P2P sites will be consolidated in the future. Consolidation will allow lenders in the P2P sphere to have new opportunities to verify identities and other important credit-related information. In theory, this increased verification accuracy will include access to state-held information such as pension fund and tax information. Russia also has no rigid regulation over collective investments, meaning the space is able to develop faster and more organically than in the more tightly-controlled West. Although it should be noted that there are increased risks associated with less control, especially actual and/or perceived abuse of such spaces. Perhaps the most intriguing area with a great development opportunity is that of cryptocurrencies. Despite threats from authorities to prohibit their circulation in the country, Russia has yet to pass any such regulations; moreover, a more restrictive policy has not received much support from the public. If Russia is to strengthen its position in the global financial market, regulations over this area will need to be kept to a minimum.