The Dialogue on Global Digital Finance Governance research and discussion bridges gaps in awareness of BigFintechs’ SDG-impacts by providing an overview of the pertinent issues that regulators and policymakers should consider at the nexus of sustainable development and Big Fintech governance. 
Beyond embedding awarenses, the Dialogue has developed a set of principles to guide policy makers, regulators and BigFintechs in the design of BigFintech governance frameworks that support sustainable development. The toolkit also includes a series of recommendations for potential future regulatory pathways.   

Principle 1:
Ensuring Foundational Financial Regulatory Objectives

Four foundational financial regulatory objectives underpin a robust policy approach toward financial market protection and must be universally ensured in order to achieve effective governance of BFTs internationally. 

1.1 Financial stability is core to financial regulation.  
It can be understood in both negative (the absence of a systemic risk”.  BigFintechs, due to their size, extensive use of innovative technologies and both innovative and interconnected models, pose new types of threats that require careful consideration.

1.2 Ensure that finance is available at appropriate cost to individuals, businesses, and government.  
Market efficiency and fair competition support economic growth and employment, and underpins financial inclusion and sustainable development. This objective is also concerned with the potential negative consequences of dominance in market segments or the entire financial system. Regulators must adequately regulate BigFintechs with significant presence in both financial and non-financial spaces and prevent firms from becoming too-big or too-connected to fail. 
1.3 Protect consumers and investors from abuse by financial institutions  
Consumer and investor protection fosters confidence in the financial system and reduces financial crime. As financial markets become more sophisticated and more aspects of our lives go digital, regulators must adapt and provide certain protections to online theft, fraud, data protection, cyber security.  This is also true in relation to BigFintechs, whose core businesses often involve some level of data exploitation and monetization.
1.4 Ensure market integrity requires preventing criminal and terrorist use of the financial system.  
Money laundering and terrorism financing can have destabilizing effects in economies as they fuel illegal activity. In developing countries, this can fuel corruption and stifle economic growth as funds are diverted from legitimate, welfare-enhancing public spending initiatives. 

Principle 2:
Developing reflexive and iterative regulation 

Regulatory interventions should be targeted, with mechanisms that allow for rapid review and adaptation. The need for a reflexive and iterative approach stems from the rapidly developing technologies used by BigFintechs and variations in societal capacity to engage with that technology. 

Principle 3:
Fostering responsible actors 

​Considering the numerous instances of damage to the environment and/or society in developing countries caused by large transnational enterprises, adequate due diligence, reporting and disclosure will ensure a minimum level of transparency and accountability for BigFintech operations. 

Principle 4:
Ensuring oversight and enforcement

Match the direct application of standards to BigFintechs proposed in principle 3 with appropriate oversight and enforcement mechanisms that could benefit from Regtech and Suptech solutions.  

Principle 5:
Instilling a commitment to sustainable development

To enhance the responsible conduct of BigFintechs and to better support the attainment of the SDGs, governance frameworks and initiatives should require a board-level commitment of BigFintechs to incorporate the SDGs into business plans and models, particularly when operating in developing countries.

Recommendations to support implementation of the Principles

Recommendation 1
Financial, data, and competition regulators should take into account...
Financial, data, and competition regulators should take into account how their decisions affect broader economic and social indicators, and implement regulatory policies that facilitate or, at the very least, do not negatively affect the attainment of SDGs. This is particularly relevant in the context of reflexive regulation since some regulatory strategies can lead to different results in different jurisdictions.
Recommendation 2
International financial supervisory organizations should consider...
International financial supervisory organizations should consider forming a joint standing committee or working group whose principal focus is to galvanize and coordinate action towards the realization of the Bali Fintech Agenda.
Recommendation 3
National governments should consider the establishment of interagency teams...
National governments should consider the establishment of interagency teams and units that can work congruently on issues that relate directly to BFT governance within their jurisdictions.
Recommendation 4
Regional organizations and national governments should support industry...
Regional organizations and national governments should support industry adoption of responsible business frameworks, such as the UN Guiding Principles and the OECD Guidelines, and seek stronger public-private collaboration for implementation of the SDGs.
Recommendation 5
The complexity and challenges of BFT governance mean that this is a subject upon...
The complexity and challenges of BFT governance mean that this is a subject upon which developing countries may well need assistance, and so cooperation among regulators will be critical to avoid “regulatory arbitrage” and achieve effective and consistent regulation of BFTs.

The UNDP-UNCDF principles based approach to BigFintech governance calls for a more ambitious and convergent approach to how BigFintechs’ impacts are managed across regulatory domains. The Principles laid out in the study promote collaboration between regulators from different domains and markets, more corporate accountability, proper enforcement and oversight as well as greater overall commitment to sustainable development. Their uptake is critical to reaching many of the SDGs.

Read the full study