Non-bank Financial Services Authority (FSA) was established under the Law on Organization and Functioning of the Non-bank Financial Services Authority (FSA) in 2011. The public can get more information about FSA via its website fintech.fsa.gov.kh/aboutFsa?lang=kh or fsa.gov.kh .

The Non-bank Financial Services Authority (FSA) is independent in fulfilling its functions which integrate management and supervision mechanisms of non-bank financial services, including the sectors of private insurance and pension, securities, social security, trust, accounting and auditing as well as real estate, pawnshop and pledge, and with the purpose of strengthening and ensuring the effectiveness of management, oversight and development of non-bank financial sector and the promotion of development and use of non-bank financial technology in the Kingdom of Cambodia. Overall, FSA fulfils its function as a policymaker for non-bank financial sector, including non-bank FinTech.

FSA has 8 subordinate entities serving as its operational bodies such as (1) General Secretariat; (2) Insurance Regulator of Cambodia; (3) Securities and Exchange Regulator of Cambodia; (4) Social Security Regulator; (5) Trust Regulator; (6) Accounting and Auditing Regulator; (7) Real Estate Business and Pawnshop Regulator; and (8) Internal Audit Unit.

Subordinate Regulators and Units of the Non-bank Financial Services Authority (FSA) who have authority to manage and develop non-bank financial technology (FinTech) include the six subordinate Regulators (Insurance Regulator of Cambodia, Securities and Exchange Regulator of Cambodia, Social Security Regulator, Trust Regulator, Accounting and Auditing Regulator, and Real Estate Business and Pawnshop Regulator) who manage and develop non-bank financial technology within their purview, and a FinTech Center of the FSA General Secretariat. 

Responding to the Cambodia Digital Economy and Society Political Framework 2021-2035 the Royal Government has issued the Cambodia Financial Technology Development Policy 2023-2028 with a long-term vision of developing financial technology based on the enhancement of financial inclusion, the maintenance of financial sector stability, and the promotion of financial innovation to take maximum advantage of digital transformation in the financial sector and to provide opportunities for all actors, aiming to contribute to the acceleration of the development of Cambodia’s vibrant digital economy and society.

The Cambodia Financial Technology Development Policy 2023-2028 aims to develop a vibrant FinTech ecosystem through the development of policy enablers, the development of digital enablers, the promotion of the use and development of enabling technologies, and the promotion of the development and innovation of financial technology activities to improve access to financial services, trustworthiness, and quality of life for consumers in the digital age”. 

The Cambodia Financial Technology Development Policy 2023-2028 has goals reflecting the 4 parts of the Cambodian FinTech Tree which are (1) Development of Policy Enablers represented by “Soil”; (2) Development of Digital Enablers represented by “Roots”; (3) Promotion of the Use and Development of Enabling Technologies represented by “Trunk”; and (4) Promotion of the Development and Innovation of FinTech Activities represented by “Branches”. 

For the implementation of the Cambodia Financial Technology Development Policy 2023-2028 the Royal Government adopted 3 main principles which are (1) enhancement of financial inclusion; (2) maintenance of the financial sector stability; and (3) promotion of financial innovation.

In order to develop Cambodia FinTech, 3 main approaches are used in the implementation of the Cambodia Financial Technology Development Policy 2023-2028, which are (1) Adoption: refers to the acquisition of knowledge, experiences, and international best practices in FinTech development, which serve as a basis for FinTech development in Cambodia; (2) Adaptation: refers to the modification of knowledge, experiences, and international best practices in FinTech development that Cambodia has adopted by ensuring they are in line with the actual condition of Cambodia’s digital economy and society; and (3) Further Innovation: refers to any further innovation in addition to knowledge, experiences, and international best practices in FinTech development that Cambodia has adopted and adapted ingeniously to create new opportunities for FinTech development in Cambodia.

The Cambodia Financial Technology Development Policy 2023-2028 has a total of 52 policy measures, including 19 measures in the development of policy enablers; 12 measures in the development of digital enablers; 12 measures in the promotion of the use and development of enabling technologies; and 9 measures in the promotion of the development and innovation of FinTech activities.

The preparation of policy implementation mechanisms is based on existing institutional mechanisms in the banking sector and the non-bank financial sector as well as within certain relevant Ministries and institutions under the coordination and leadership of the Digital Economy and Business Committee. The responsible institutions for implementing the policy measures need to develop a clear work plan and a cost plan to cover the implementation of the action plan through the use of performance-informed budgeting mechanism in accordance with the Law on Public Finance System and other relevant regulations. At the same time, the responsible institutions for implementing the policy measures must diligently execute the established plan and demonstrate budget accountability. The responsible institutions for implementing the Cambodia Financial Technology Development Policy 2023-2028 are the following: 

• The National Bank of Cambodia: implements policy measures on FinTech development for banking financial sector and participates and collaborates in the regular sharing of data and reporting with DEBC. 
• Non-bank Financial Services Authority (FSA): implements policy measures on FinTech development for non-bank financial sector, and who has 6 FSA’s subordinate Regulators (Insurance Regulator of Cambodia, Securities and Exchange Regulator of Cambodia, Social Security Regulator, Trust Regulator, Accounting and Auditing Regulator, and Real Estate Business and Pawnshop Regulator) and the FinTech Center of the FSA General Secretariat serving as its operational bodies and participating and collaborating in the regular sharing of data and reporting with DEBC. 

In accordance with the Cambodia Digital Economy and Society Political Framework 2021-2035 FinTech refers to technologies and innovation in financial sector, including banking and non-bank financial sectors, which are developed for the use, provision and receiving of wider and inclusive financial services.

Enabling technologies for the development of FinTech include Artificial Intelligence (AI), Machine Learning (ML), Big Data, Cloud Computing, Blockchain Technology, Smart Contract, Natural Language Processing (NLP), Virtual Reality Technology (VR), and Data Analytics (DA).

Currently, Cambodia has not adopted the Law on Financial Technology. However, Cambodia has certain laws and regulations developed for building the legal ecosystem which supports the development of financial sector and the promotion of digital transformation through the building of digital infrastructure, digital trustworthiness, digital citizens, digital government and digital business. 

Based on international experience and best practices the development of FinTech contributed to the acceleration of vibrant digital economy and society development and which offers many positive impacts on (1) enhancement of financial inclusion; (2) maintenance of financial sector stability; and (3) promotion of financial innovation. With regard to the enhancement of financial inclusion, FinTech can democratize access to financial services, foster the use of financial services, and improve the quality of financial services with reduced costs and time. For the maintenance of financial sector stability, the FinTech promotes financial decentralization and diversification, transparency, effectiveness and efficiency of financial services, and strengthens the sovereignty in the financial sector through the use of certain enabling technologies. As regards the promotion of financial innovation, the FinTech requires the development of FinTech Regulatory Sandbox, the diversification of FinTech activities, the encouragement of FinTech innovation or startups, the establishment of FinTech innovation center or FinTech innovation laboratory, and other FinTech innovation initiatives.

Although FinTech brings many positive impacts, it can introduce some risks such as: 

• A risk to the economy through several factors, including market monopoly by a few FinTech firms, the increasing use of digital assets, and the significant growth of lending institutions, digital payment systems, and other FinTech services or products which are not banking and financial institutions. 
• A risk to sovereignty in the financial sector, especially surrounding digital payment. For instance, if a country relies almost entirely on international companies, especially giant tech firms to provide digital payment services, sovereignty in the country’s financial sector may be exposed to threats. 
• Risks to the society which can lead to a lack of financial inclusion through algorithmic bias and predatory lending practices. This will bring about negative impacts on vulnerable people such as women, the poor, the elderly, and the people living in the remote areas etc. 
• Risks to data privacy as some of the data that consumers perceived to be irrelevant to financial aspects including their online search history, behavior in using social media, and mental health information, could be used or monetized without consent from consumers or data owners and so on. 

Based on researches, FinTech innovation faces some challenges which cause slow pace of the innovation, such as:

• Digital literacy: Lack of digital knowledge among the general public prevents the adoption of new technologies, and the lack of digital information results in limited market. 
• Infrastructure: Infrastructure with limited access and use or with high costs can make it hard for some consumers to use services, affect service costs which are costly, and have negative effects on startup entrepreneurs comparing to the existing large firms. 
• Unfavorable or ambiguous legal environment: Rigid law environment can have implications for startup entrepreneurs and reduce investment attraction. Legal ambiguities can also be time-consuming for law enforcement and result in non-compliance with laws.  
• Lack of talents: Lack of local technical experts leads to the competition with each other for talents or requires the employment of high-paid experts from other countries. 
• Delicate or non-vibrant ecosystem: A FinTech ecosystem which is delicate and which is not full of enabling services among relevant interactors has implications for the wider expansion of services for consumers, and results in limited services.  

There are 2 types of Cambodia FinTech which are FinTech in banking sector and FinTech in non-bank financial sector. The FinTech in banking sector falls under the jurisdiction of the National Bank of Cambodia and which includes digital payment, digital saving and digital transfer. With regard to FinTech in non-bank financial sector, it falls under the jurisdiction of the Non-bank Financial Services Authority (FSA) who has 6 subordinate Regulators and the FinTech Center as its operational bodies and which includes FinTech for insurance sector (insurance technology), FinTech for securities sector, FinTech for social security sector, FinTech for trust sector, FinTech for accounting and auditing sector, FinTech for real estate business and pawnshop sector, and other financial technologies. 

Based on the Cambodia Digital Economy and Society Political Framework 2021-2035 and the Cambodia Financial Technology Development Policy 2023-2028, the FinTech Regulatory Sandbox is an environment for FinTech institutions to experiment on their services and products with real customers, but within a certain size and timeline before launching and promoting widespread use.

The Non-bank Financial Services Authority (FSA) has issued a Proclamation No. 037 Or.Sor.Hor.Brokor. dated 04 August 2023 on FinTech Regulatory Sandbox for Non-bank Financial Services with the purpose of setting management framework on the application of FinTech regulatory sandbox of relevant Regulators who are subordinated to the Non-bank Financial Services Authority (FSA) and with the goals of promoting the adoption, adaptation and innovation of technologies in the non-bank financial sector in accordance with the Cambodia Digital Economy and Society Political Framework 2021-2035. Under this Proclamation, all relevant Regulators subordinated to FSA shall issue guidelines on FinTech regulatory sandbox which will set goal, principles, criteria, procedures for application, requirements for getting authorized access to FinTech regulatory sandbox, obligations during the testing period, post-trial obligations, and information to be shared with the Regulators so as to ensure the management and supervision of the FinTech trial for financial products and services, which are or may be placed within the purview of relevant Regulators subordinated to the FSA. In the meantime, Securities and Exchange Regulator of Cambodia has issued Guidelines No. 009/23 Nor.Mor.Kor/Kur.Nor.Nur. dated 07 August 2023 on FinTech Regulatory Sandbox in Securities Sector, which replaces the Guidelines No. 001/22 Nor.Mor.Kor./Kur.Nor.Nur. dated 11 April 2022 on FinTech Regulatory Sandbox in Securities Sector. The new Guidelines set the procedures for the application for authorization, validity of the authorization, goals, principles, evaluation criteria, exceptions to the rule, obligations during testing period, post-trial obligations, exit from regulatory sandbox, withdrawal of authorization, enforcement of other measures, and pricing. In addition, Insurance Regulator of Cambodia has also issued Guidelines No. 002 Nor.Thor.Kor./Sor.Nor.Nur. dated 16 January 2023 on Insurtech Regulatory Sandbox aiming at promoting technology innovation resourcefully in the insurance sector. The Guidelines set goals, types of Insurtech for testing, procedures for the application for authorization, obligations during testing period, extension of testing period, withdrawal of authorization, stop testing and exit, and pricing. 

To get news updates on FinTech in Cambodia, the public may follow websites/web addresses, Telegram channels or Facebook pages of the Regulators subordinated to the Non-bank Financial Services Authority (FSA) or may follow web portal (fintech.fsa.gov.kh), Telegram channel (t.me/fintechportalfsa) or Facebook portal (facebook.com/fintechportalfsa) of the FinTech Center of FSA General Secretariat.

Currently, in order to enhance the development and use of non-bank FinTech, the Non-bank Financial Services Authority (FSA) who has the FinTech Center of the FSA General Secretariat as its general staff has developed some major enabling tools as follows: 

• FinTech portal: is the Cambodia’s FinTech development and innovation platform serving for collection, treatment and dissemination, and it allows all social actors to get access to information, data, files and FinTech services. The platform has two formats which are (1) web portal (fintech.fsa.gov.kh) which allows the public to get access to the 24/7 service while its functions are continuously developed; and (2) FinTech portal phone application which is still in the process of being developed. 
• FinTech lexicon: is a trilingual lexicon phone application (Khmer, English and French) of terminologies and its available definitions. The lexicon classifies terminologies into four main categories which are digital, financial (bank and non-bank), other fields and general terminologies. The lexicon phone app can also perform other functions including information related to FinTech, links to non-bank and banking financial Regulators, contact information, and comment boxes proposed by users. The public can download the FinTech lexicon app via the link: onelink.to/tfh35a which works on both iOS and Android systems. 
• FinTech compendium: is a regulation tool which serves to develop FinTech in the non-bank financial sector through the collection of laws and regulations in force which are general and specialized original texts covering digital, non-bank and bank financial sectors. It is an indispensable basis for the building of ecosystem which is conducive to FinTech sector development. Among these key sectors, digital sector is an overarching umbrella and a cause of advancements in other sectors.