Over the past decades, Taiwan’s economic growth over the past decades is of outstanding success, it possesses considerable industrial and logistical fabric, a skilled STEM workforce, strong R&D capabilities and a geographical entryway into China and ASEAN. In addition, on the globe, it is one of the few economies that managed to fend of the Covid-19 pandemic with only 16,915 Coronavirus cases, and 66% of its population is already fully vaccinated.
Taiwan’s major economic objective in recent years has been the establishment of an international and more liberalized economy. Strategies adopted include loosening restraints on foreign exchange control, reducing tariff and nontariff barriers, and opening domestic markets. Foreign investment is now permitted in almost all industry sectors and domestic shareholding and business operations requirements and restrictions on the repatriation of profits and capital have also been greatly reduced. Nevertheless, Taiwan has been rather selective about the kinds of investment to incentivize; hence, it has evolved an elaborate, fluid, legal and administrative framework for the admission and direction of foreign investment.
Nowadays, one of these targeted sectors is Financial Technology (or commonly named as “fintech”), this term describes banking and other financial services with the application of technology. These new applications possess the ability to change our daily lives, and be innovative (or disruptive) in the banking and financial sectors. Moreover, they represent more secure and efficient financial services, and, at the same time, promote financial inclusion, bringing benefits to an ever-expanding body of customers.
Taiwan’s Legal System
In regard to fintech, on 31 January 2018, Taiwan promulgated the “FinTech Development and Innovation and Experiment Act” 「金融監督管理委員會」, also referred as the “Sandbox Act”, on it; Taiwan offers a platform to test the feasibility and effectiveness of new applications of fintech technologies, where experimental activities in a controlled-risk environment unencumbered by certain laws and regulations (e.g. licensing requirements and certain legal liability exemptions). After the FSC pre-approved sandbox experiments, the FSC may review the existing financial laws and regulations that pose obstacles to the tested fintech innovation.
The Sandbox mechanism for innovative experimentation prevents regulatory infractions in the enterprises pursue for the new development of fintech services. In addition, it protects consumer rights and maintain market order, with an emphasis on responsible innovation. Sandbox experimentation may range from 1 to 3 years, extendable for periods of 6 months where cases involve legislation amendment.
Government Regulating Body
As to the mechanism of the regulatory sandbox, Taiwan’s Financial Supervisory Commission (FSC) is the competent central government authority regulating all financial products and services; although, other competent authorities (such as the Central Bank),can also be consulted by the FSC. The FSC further organizes into 4 bureaux, each independently responsible for regulating a sector in the banking, securities and insurance industries, they are the Banking Bureau (BB), the Securities and Futures Bureau (SFB), the Insurance Bureau (IB) and the Financial Examination Bureau (EB). As fintech can come in any form or size in the finance or the banking industry, there is no specifically designated bureau to regulate fintech products and services. Therefore, it should depend on the nature of such products and services to determine which bureau would be the body regulating the relevant fintech products or services.
Fintech Incentive Programs
In addition to the sandbox mechanism described above, in 2018, the Taiwan government’s Financial Supervisory Commission (FSC) also established a ‘FinTechSpace’, that provides relevant assistance to fintech start-ups, integrate cross-industry resources and construct a virtual and real innovation ecological environment for the fintech industry; a ‘regulatory clinic’ to provide free preliminary advice regarding Taiwan regulations (provided by government officials), and a Go Incubation Board for Startup and Acceleration Firms (GISA) of the Taipei Exchange (TPEx).
Tax Incentives
Regarding tax incentives, there is no specific incentive tailored for fintech, however, regarding R&D, a fintech company, that did not commit any material violation of any law on environmental protection, labor or food safety and sanitation in the past 3 years may choose to either apply to:
- within a year, credit up to 15% of R&D expenditure against its payable income tax; or
- credit up to 10% of its R&D expenditure against its corporate income tax payable for each of the 3 years starting from that year.
Nonetheless, in both cases, the deduction amount is limited to 30% of the payable income tax.
Fintech Startups
As fintech possibilities can be as infinite as finance and banking, and affect our daily lives more than we can envision, hence, it is curious seeing what is happening for the fintech scenario in Taiwan. Up to 2021, there are more than 40 fintech startups in Taiwan, that are spread throughout the categories of InsureTech, Lending, Payment, Robo Advisor, Information Security, International Accelerator, Graduation team, Regtech, Integration Platform and Enterprise Solution. Following is a list of companies and a brief description on the products and services being developed:
|
Sector |
Company |
Product & Objectives |
|
InsureTech (Insurance) |
Eureka Fintech Limited |
Anti Money Laundering (AML)/Know Your Customer (KYC) and solutions to compliance problems, Identity verification in KYC information including supply-chain information, AML and Compliance solutions to manufacturers and financial institutions. |
|
ActuaViz Co., Ltd. |
ActuaViz Actuarial Platform: Insurance analytics solution. |
|
|
Robinstech |
Digital Intelligence Auto Insurance Service Platform (such as Claim On-Line,Legal advice, Car maintenance and detailing). |
|
|
BravoAI Co., Ltd. |
AI InsurTech Solutions, AI solutions to property insurance industry. The solutions include standard products in underwriting and claim process automation as well as accurate risk models for adaptive loss control. |
|
|
Lending |
AlphaLoan |
AlphaLoan, an online (personal and credit card) loan comparison platform. |
|
Gavin Marketing Inc. |
SmartLoan, linking customers to banks and vice-versa. |
|
|
FundPark |
Trade finance platform for corporations: Supply Chain Financing, Purchase Order Financing, Invoice Financing, and Inventory Financing. |
|
|
Payment |
FastPay Int’l Ltd. |
FastPay Remittance App for foreign exchange settlement, bills payment, buy loads, loan repayment, government funds payment, etc. for foreign workers in Taiwan. |
|
Taiwan Insto Technologies Co., Ltd. |
INSTO Direct rapid checkout, Cardless Installments, and INSTO Tap (NFC contactless payments): credit card and installment payments collection. |
|
|
Robo Advisor |
DC Financial Tech Ltd. |
AI Quant Investment strategy system, an investment advisory strategy platform using AI quantitative trading strategies and the establishment of algorithmic trading systems. |
|
TradingValley |
Growin, an AI-driven automated investing service. |
|
|
SmartRefill AB |
Mobile Banking, Mobile Phone card payment system: • Fintech system take over – Develop B2C point management app for telecom operators. Develop white label mobile banking app for banks. Other products include pension management apps and the development of an online credit card application system. • Software license fee-to authorize third parties to use our API and development modules in the telecommunications prepaid card payment platform. • SLA (Service Level Agreement)-The company’s customers can choose to station the developed platform on the company’s host. We provide 24/7 monitoring and maintenance services. |
|
|
Joinvest Co., Ltd. |
Group Buy Platform for Bonds for investors with limited capital. |
|
|
NexTrek |
NexTrek, a Cloud-Based Cash Flow and Financial Management Software. |
|
|
FundSwap |
FundSwap, solutions in fund exchange models and services, aiming to save investment costs and expedite the process of purchasing and redeeming funds. |
|
|
Fortuna Intelligence Co., LTD |
Fugle investment account, an online securities service. |
|
|
Information Security |
KlickKlack Information Security Co., Ltd. |
HACFO, an independent third-party auditing service of penetration testing (PT) for enterprises. |
|
CYBAVO INC. |
CYBAVO VAULT, a secure cryptocurrency vault and wallet manager for corporate accounts; with cryptocurrency exchanges, custodians, fund managers ICOs, DApp developers or payment gateways as institutional customers. |
|
|
Caulis |
FraudAlert, a human-centric Identity verification and fraud detection platform across devices |
|
|
International Accelerator |
Rainmaking Innovation |
Industry Accelerator for Digital Health, Smart Manufacturing（Industry 4.0）, Fintech and Smart City fields. |
|
Graduation team |
Quanstamp |
Smart contract security |
|
V&T(Wei Ke) Co., LTD. |
Banknote security printing technology, anti-counterfeit machines (from detector, value counter to the high-end of fitness sorting machines). |
|
|
Regtech |
Kdan Mobile Software |
DottedSign, Identity verification through electronic signature. |
|
WebComm Technology |
FIDO, solutions and system construction services in AI, Data Application, Cloud Computing Services and Security . |
|
|
Lawsnote |
Lawsnote Compliance System: “Contract Review Automation System”, “Compliance Risk Assessment System”, “Legal Document Search Engine”, “FindLawyer Marketplace platform”. |
|
|
KryptoGO |
goFact, an financial regulatory DD search (complying to regulatory standards, including services such as verifying identities, cryptocurrency transaction tracing and tracking, cross-chain data analysis, and targeted identities’ risk analyzing, controlling, and monitoring). |
|
|
AuthMe
|
AuthMe ID Verification Solution, ID authentication in financial institutions, vehicle sharing platform, online education platform. |
|
|
ThinkCloud Technology Co., Ltd. |
SelfieSign, a Dynamic Biometric e-Signature (DBS) system based on video recording and facial recognition. |
|
|
Integration Platform |
CanLead International co., LTD |
HowCool, a VIP service group (airport limo pickup, global VIP lounge service, global concierge service, global emergency assistance, hotel and restaurant booking service). |
|
MMXtion Technology Co., Ltd. |
Petzzo, an Anti Money Laundering (AML)/Know Your Customer (KYC) series of solutions for real-time supervision, fraud prevention and early warning of market information according to customer demand. |
|
|
Credidi Inc. |
Credidi Wallet. |
|
|
Invos |
Invos, for invoice information integration, management and recording. |
|
|
Moneybook Co., Ltd. |
Moneybook is a personal financial management service that brings together customers’ bank accounts, credit cards, bills, loans and investments. |
|
|
Finatext Taiwan Ltd. |
Business & capital partnership with Taishin Securities. |
|
|
Anfu Solutions INC. |
House+, a commercial platform created to bring transparent housing prices Other services include data mining, model development, and platform design, etc. |
|
|
Anyong Fintech Co., LTD |
GOSU Chatbot Solution (GOSU PARTY, GOSU BAR, GOSU HUB), a cross-social conversational business construction platform. |
|
|
Enterprise Solution |
Dun & Bradstreet Taiwan (港信科技有限公司) |
Data Blocks, Data API. |
|
China Credit Information Service, LTD. |
Anti Money Laundering (AML)/Know Your Customer (KYC) for Identity verification and Robo Advisor). |
|
|
Xquare, Inc. |
NanoTrade, FPGA-as-a-Service for high-frequency trading usage. |
|
|
Ficusdata |
Ficusdata Ultra low latency Trading System (uses AI solutions to train models, gain insights on financial data trends, and apply it to financial services). |
|
|
Mojodomo Taiwan Co., Ltd. |
Mojodomo Loyalty Voucher 1. Highly-scalable, end-to-end, proprietary B2C2B platform 2. Fastest growing Merchant Network available to loyalty marketers in Asia 3. Real-time Data Lake driving peak-performance in customer engagement |
|
|
ESG Matters Limited |
ESG Dashboard (sustainable impact investing and green financing), business process outsourcing (BPO) service. |
|
|
NexTrek |
NexTrek, a Cloud-Based Cash Flow and Financial Management Software to integrate and link banks, payment gateway and tax information, and digitize accounting workflows. |
|
|
GreenHopeBC.Taiwan |
Blockchain Agent Total solution, included Blockchain and Geographic Spatial Information Technology to provide application Layer of Blockchain and transfer Smart-Contract to Restful API to let website or application system can easily connect to Blockchain. |
Source: Taiwan FinTechSpace Hub 「金融科技創新園區」website.
Taiwan is gearing towards an optimized environment for innovation and entrepreneurship, cooperation between financial and non-financial services and as new fintech services are constantly emerging with the potential to disrupt (in a good way) our daily lives, in 2018, the Taiwanese government has passed the “FinTech Development and Innovation and Experiment Act” to promote related development and create a sandbox mechanism for innovative experimentation. Hence enterprises will accelerate fintech development as firms race to seize business opportunities, better our daily lives, and in the process raise the competitiveness and quality of Taiwan’s financial services.
