Financial innovation and alternative finance: a comparative analysis of the objectives of regulation and its impact on lending based crowdfunding in France and in the UK

Abstract

With the advent of alternative sources of finance and the new phenomenon of FinTech, which includes crowdfunding in its various models, regulators now face the challenge of how to regulate this innovative form of finance, and try to anticipate the impact regulation will have. Focusing on lending based crowdfunding in the European Union and on the basis of a mixed method approach, this dissertation concludes that the main objectives of regulation are promoting growth in this industry, maintaining financial stability and the soundness of markets, and ensuring safeguards for participants in this market, especially for SMEs and individuals. On the impact of regulation, the scenarios in France and in the United Kingdom were analysed to conclude that, in spite of significant differences in the way regulation has been designed in these two countries, introducing regulation has had positive effects, supporting growth in crowdfunding activities and market confidence.

Com o surgimento de fontes alternativas de financiamento e o novo fenómeno de FinTech, que inclui o financiamento colaborativo ("crowdfunding") nos seus diferentes modelos, as entidades reguladoras veem-se confrontadas com o desafio de como regular esta forma inovadora de financiamento, e tentam antever o impacto dessa regulação. Focando no crowdfunding de empréstimos na União Europeia, e com base numa metodologia de pesquisa de métodos mistos, conclui-se que os objetivos principais da regulação são o de promover o crescimento desta indústria, de manter a estabilidade financeira e a solidez dos mercados, e de garantir a proteção dos participantes neste mercado, em especial as PMEs e os indivíduos. Quanto ao impacto da regulação, foram analisados os cenários em França e no Reino Unido tendo-se concluído que, apesar das diferenças significativas na forma como a regulação foi desenhada nestes dois países, a introdução da regulação teve efeitos positivos, levando ao crescimento dos negócios de crowdfunding e da confiança no mercado.