Digital Banks And Service Model Banking In Turkey

The Regulation on the Operation Principles of Digital Banks and Service Model Banking ("Regulation"), published in the Official Gazette dated 29 December 2021 and numbered 31704, was issued by the Banking Regulation and Supervision Agency's ("BRSA") and it entered into force on 1 January 2022. In a nutshell, the Regulation provides the principles and procedures of the (i) operations of digital banks -branchless banks-, and (ii) banking services provided to customers by the service banks through interface developers, such as FinTech companies.

The Regulation, enabling the establishment of digital banks and introducing service model banking, is considered a milestone by the BRSA in terms of the development of Turkey's financial sector and FinTech ecosystem by enabling numerous innovative business models.