FEATURES OF NEOBANK REGULATION WORLDWIDE

Abstract

The article examines the specifics of neobank regulation in the context of global digitalization. The digitalization of finance presents banking supervisory authorities with a range of challenges, including defining the regulatory perimeter, assessing the adequacy of existing rules, and adapting supervision to new regulatory frameworks. History shows that compliance with these regulatory requirements can be complex and time-consuming for neobanks, particularly given the constantly evolving nature of banking regulations. It is noted that, unlike traditional banks, neobanks are not necessarily required to obtain a full banking license to operate—although this depends on the legislation of the country in which they are based. Depending on the type of services provided, neobanks must either obtain the appropriate type of license or operate based on a partnership with a licensed bank. For instance, if neobanks provide services that traditional banks typically offer, they must obtain a full banking license. It is asserted that compliance with regulatory requirements is critical not only for legal reasons but also for a neobank’s success and trustworthiness. The article analyzes regulatory frameworks in the EU, the UK, the US, the Asia-Pacific region, Latin America, and Ukraine. It is observed that, although regulatory support has played a vital role in the development of neobanks, they still face significant regulatory challenges. The advancement of modern banking technologies must be accompanied by protective measures, increasing costs and potentially slowing down the adoption of digital elements in banking systems. As neobanks navigate these challenges, their ability to innovate, adapt, and strategically overcome obstacles will not only determine their individual success but also shape the future landscape of the banking sector. The article concludes that the advantage of adopting new regulatory acts is that they provide a clear and uniform strategy for all market participants. Additionally, a new regulatory framework can ensure an adequate response to the challenges of the modern financial services industry.