Home Policy & Governance Czech Republic seeks to ‘unlock potential’ of fintech

Czech Republic seeks to ‘unlock potential’ of fintech

Brno, Czech Republic: deputy finance minister Jiří Georgiev says the initiative will 'bring resources to unleash widescale data usage for our citizens, financial markets and our economy' | Credit: Skitterphoto; Pixabay

The Czech Republic’s government has instigated a European Union (EU)-backed project to ‘unlock the potential’ of fintech applications and the use of data in financial services.

Activity will involve a ‘feasibility study’ on data’s potential in financial services and the possible establishment of a sandbox ‘to allow fintech innovation on the basis of data sharing and usage’, according to an announcement from the Ministry of Finance.

The project is being financed by the EU through its Technical Support Instrument (TSI) – a funding programme providing technical support to EU member states’ reform agendasand implemented by the Organisation for Economic Co-operation and Development (OECD), in co-operation with the European Commission’s Directorate-General for Structural Reform Support (DG Reform).

The project was kicked off by deputy finance minister Jiří Georgiev, alongside representatives of the Ministry of Finance and Česká národní banka (ČNB – Czech National Bank), as well as European Commission, OECD and industry associations at a Ministry of Finance-hosted event in Prague.

“Czech financial authorities understand the priority of fostering fintech innovation as a way to drive productivity gains, create jobs, promote economic growth and encourage competition in financial services, but also as a way to allow consumers to better control and better use data’s potential,” Georgiev said. He added that the initiative would “bring resources to unleash widescale data usage for our citizens, financial markets and our economy”.

The project is linked to Chapter 1.4 of Czech Republic’s ‘National Recovery and Resilience Plan’. This is focused on digital technologies and aims to create sandboxes in regulated sectors in line with EU priorities.

‘Unleashing the potential of data’

The Czech Republic is gearing up to take over the rotating six-month presidency of the 27-member EU, which it joined 18 years ago, during the second half of this year.

Alex Ivančo, director of the Czech Ministry of Finance’s ‘Financial Markets III’ department, said that “unleashing the potential of data is the way for the Czech Republic and Europe to thrive in this new digital era”.

The European Commission has just opened consultations on the ‘open finance framework and data sharing in the financial sector’, as well as on the application and impact of the EU’s revised Payment Services Directive (PSD2).

Commission director-general Mario Nava described fintech as “an important tool to improve the efficiency of the financial sector, all the more so in the context of the digitalisation trend and of the Covid-19 pandemic.” He said the Czech project’s objective was to “contribute to the creation of an incentive ecosystem for fintech, for start-ups and incumbent firms”, adding that “further promotion of fintech innovation has the potential to provide important benefits to the Czech economy”. A sandbox, Nava said, would “foster a better use of financial services by all economic actors, then enabling a significant growth potential for these markets, while regulating them, ensuring consumer protection, market integrity and financial stability”.

The OECD’s director for financial and enterprise affairs, Carmine Di Noia, meanwhile said the project would “support policies that promote fintech innovation with a focus on data that maximises the benefits of the digital transformation for the Czech economy while managing the risks and unintended consequences for financial markets, consumers and the economy.”

Reacting to the plans, Jiří Fuchs, who is board chairman of Czech tech association CTIT, told Global Government Fintech: “We all know that ‘data is the new gold’, and this is especially true in the fintech sector. Researching the potential of data in financial services seems vital to us as it could further foster the innovation of fintech in the Czech Republic.”

Sandboxes’ ‘proven’ success

An increasing number of countries worldwide are setting up sandboxes to help nascent fintech solutions.

Within the EU, Global Government Fintech reported last month that the Cyprus Securities and Exchange Commission was considering establishing a regulatory sandbox, while Greece and Spain are among the member states where sandboxes have launched in the past year.

Greece’s sandbox, run by the country’s central bank, was funded by the EU via DG Reform and implemented in collaboration with the London-headquartered European Bank for Reconstruction and Development (EBRD). 

“Sandboxes across Europe and the world have proven to be one important avenue for financial authorities to accompany the development of innovative financial solutions in a safe and controlled manner,” said Di Noia. 

Efforts are underway at EU level to improve communication about, and co-ordination between, different countries’ sandboxes, innovation hubs and other similar initiatives that aim to help fintech companies. Speaking last month at the launch of the EU Digital Finance Platform, a ‘collaborative space’ that aims to encourage interaction between European supervisory authorities and innovators, the EU’s financial services commissioner Mairead McGuinness said that national supervisors “have made big efforts to improve what they offer to the companies they work with but have to go further”.

European Digital Finance Association president Maria Staszkiewicz suggested during a panel discussion (held as part of the same event) that the growing number of EU-backed sandbox initiatives could leave companies uncertain which regimes or procedures to follow. She referred to the Commission’s AI act proposal (unveiled one year ago), which pushes for AI sandboxes, and the plan to create an EU ‘blockchain sandbox’.

*** The European Commission’s Nava also mentioned plans to launch an EU ‘Supervisory Finance Digital Academy’ later this year. The online training platform, which will be open for participation to supervisors and financial intelligence units from EU member states and European Supervisory Authorities (ESAs) staff, was also referred to last month by McGuinness.


‘EU Digital Finance Platform to map fintech growth and support cross-border testing’ – our news story (11 April 2022) on a European Commission-hosted website created with the ultimate aim of helping private-sector innovators to ‘scale up’ fintech solutions

‘UK regulatory sandbox shifts to “always open” status’ – our news story (25 August 2021) on the Financial Conduct Authority’s regulatory sandbox evolving from a cohort-based approach to having an ‘always open’ status

‘Italy launches fintech sandbox’ – our news story (19 July 2021) on Italy’s Ministry of Economy and Finance, the Bank of Italy, financial regulator Consob and the Italian Insurance Supervisory Authority announcing that a decree launching a sandbox and establishing a ‘fintech committee’ had entered into force

‘Greece launches EU-funded regulatory sandbox in fintech push’ – our news story (15 June 2021) on Greece’s central bank launching its sandbox

Spain’s sandbox welcomes first fintech projects’ – our news story (25 May 2021) on Spain’s regulatory sandbox preparing to welcome its first cohort of fintech projects


Interested in how governments and state authorities can encourage fintech innovation? REGISTER NOW for the inaugural Global Government Fintech Lab, being held in Tallinn, Estonia, on Wednesday 1 June 2022. Dr Michal Tuláček, head of the general tax legislation unit in the Czech Republic’s Finance Ministry, will be tackling the topic of ‘How can fintech help government payments’. The Lab’s agenda also includes a session asking ‘How can governments help the fintech sector to grow?’ featuring Andrés Barragán, chief of staff in Spain’s Public Treasury; Dr Ben-Benedict Hruby, senior legal expert and policy advisor in Austria’s Ministry of Finance; and European Fintech Association board member Taavi Tamkivi.