CHALLENGES OF CORPORATE GOVERNANCE FOR FINTECH COMPANIES IN A PANDEMIC PERIOD

This paper outlines the key challenges of corporate governance for Fintech companies in a pandemic period based on the modern trends of market development and the existing opportunities for private investors to set-up this kind of company internationally. Due to divergences across jurisdictions in the governance regulation author identified the main criteria for comparison offshore jurisdictions to set-up Fintech companies by international investors.

Nowadays pandemic challenges are performed financial situation globally.
The COVID-19 outbreak has prompted payment market to move with lightning speed toward digital planforms and with that move comes pressing enhanced compliance considerations. According to the Association of Chartered Certified Accountants (ACCA), a thriving global community of professional accountants across 179 countries, financial crime costs the world USD 3,5 trillion per year [1].
It's a hefty sum to pay against the flourishing backdrop of a highly competitive, increasingly digitized financial services world. With new-age disruptive technologies permeating the business of finance, financial corporations are witnessing an all-time high in financial crime, cyber fraud and vulnerabilities.
There is increasing pressure on them to maintain low-risk business activity amidst the unrelenting COVID-19 pandemic.
In such a double-edged sword scenario, financial companies have no choice but to go digital to sustain their existing business models. At the same time,  Research shows that fintech business is the most attractive for investors during a pandemic, as it provides a high level of return on investment and allows payments, transfers and purchases of goods or services remotely. Thus, international investors and High-Net-Worth Indiciduals (HNWI) are actively looking for ways to make such kind of investments.
Current trends in the development of digital payments are a trend not only of private investors and existing fintech companies, but also for regulatory authorities of many countries. As with all business and operational developments, financial services firms need to consider the wide range of risks arising from the use of fintech and ensure that these risks are properly captured within a firm's risk governance structure and procedures. Of course, these are serious challenges for new investments in this industry. That is why corporate governance remains a key concern for many private investors and beneficiaries in this market.
Notably, that a lot of Fintech companies has a global customer base, requiring them to meet regulatory obligations across multiple jurisdictions. Some private firms in payment industry may feel corporate governance is a barrier to growth. As a result, setting-up a new company that adopt innovative payment technology may face different types of regulation. This is a key step in choosing the jurisdiction to register a fintech company and saving investors time, money and energy to support the business. At the same time, a number on offshore jurisdictions offer favourable conditions for capital raising in the financial and payment sector and low levels of taxation for carrying business. Fintech firms must therefore map the growth of their business and introduce crucial governance roles at the right time. Hiring risk, compliance, legal, audit and cyber security professionals will ensure a company's rapid growth is underpinned by strong processes and controls.
The following are some of the specific challenges Fintech payment companies face that would require bringing in heads of core governance arrangements [3][4] 6) Cyber security risk protection for improving high level of defence clients accounts and safeguard money, tengible and intengible assets and systems. This approach is required by regulators because the financial services system faces three main challenges in protecting customer data from innovation-driven cyber-riskinnovation is increasing cyber-risk to customer data, payment services companies face specific challenges in managing cyber-risk, and innovative, multi stakeholder solutions are needed to address fast-changing cyber-threats.
Importantly, that international investors are looking for safeguarding their money and keeping a lot of other advantages of offshore financial company ownership.
According to the professional's expertise, the main of these advantages include [5]: That is why significant criteria for investors are high level of financial secrecy index, missing international AML sanctions for target jurisdiction, no nessecary to travel for business place, minimum number of local employees, low level of reporting framework and burocracy procedures for carrying financial business, speed time to register company and obtain the payment licence, no requirements on resident shareholders and/or directors there, minimum number of initial capital and safeguarding requirements to protect clients' money. At the same time regulators have to protect state and public interests in any country and protect consumer's risks.
Thus, finding optimal decision to satefy governance requirements and intestors' expectation is a key to initiate Fintech payment company.
According to the regulatory divergences across different jurisdictions in the governance obligations the main criteria to set-up payment (money transmitter) companies is presented below (table 1).