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Digital banking and Banking as a Service

Turkish law compared with European law

Fintech is a growth area for Turkey and this is acknowledged by the country's regulators. With that in mind, this article outlines the main principles of the newly introduced regulation for digital banking and Banking as a Service, with respect to other laws as well as the European Economic Area regulatory framework.

Digital transformation in the financial industries is a continuous process affecting products and services provided to end users, internal processes and existing service models. Newly developed and implemented technologies are changing the conventional understanding of the business as well as the interaction with the end-users. 
Over the past years, the importance of fintech has grown significantly, and this has also affected the legislative background both in European Union (EU) and Turkey. Recently, Turkish lawmakers have regulated the concepts of digital banking and Banking as a Service (BaaS) which are seen as the wave of the future. Although the concept of digital banking in particular is often confused with mobile banking and online banking, digital banking is the incorporation of new and developing technologies throughout a financial services entity. 
In this respect, this article sets out to evaluate the legislation in respect to digital banking and BaaS by making a comparison between EU and Turkish laws, together with the legislative backgrounds. 

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