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CS Professional · IFSCA - Regulations, Listing and Compliances · Overview of FinTech and Service Providers in IFSC

A CS is asked why governments and regulators encourage FinTech growth in an international financial centre such as GIFT IFSC. Which reason is most consistent with FinTech's recognised benefits?

Regulators encourage FinTech because it can reduce transaction costs, widen access to financial services and improve efficiency. It does not remove regulatory need or cyber risk, and an IFSC is oriented to global business rather than resident-only services.

  1. AIt eliminates the need for any regulation of financial services
  2. BIt can lower transaction costs, widen access and improve efficiency of financial servicesCorrect
  3. CIt guarantees that no cyber or data risk will arise
  4. DIt restricts services to resident individuals only

Explanation

Recognised benefits of FinTech include lower costs, faster services, greater financial inclusion and efficiency. FinTech does not remove the need for regulation and brings new cyber and data risks, and an IFSC aims at serving non-residents and global business, not resident-only services.

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