Abstract/Summary

This article examines the legal aspects of virtual banking as a fintech (“Financial Technology”) platform. It emphasizes the need for a thorough review of the regulatory framework governing virtual banking, focusing on its organizational structure, business scope, and operational model. The article argues that the current technology-neutral regulations are inadequate in addressing the long-term effects of technology in the banking sector. Therefore, it proposes a technology-centric framework specifically designed for virtual banking, which would govern the use of devices, software, and online dispute resolution channels. This framework would enable both banks and regulators to regain control over technology implementation, effectively managing virtual banking risks and challenges while ensuring regulatory oversight and accountability. The article is based on extensive legal analysis conducted internationally, with a focus on the Asia region where virtual banking licenses are prevalent, and incorporates insights from interviews with virtual bank executives. The article aims to provide a comprehensive overview of the distinctive features of virtual banking and its regulatory landscape, and to identify the need for a tailored framework that safeguards the integrity and security of virtual banking operations.