Overview:
Palau’s Financial Institutions Commission joined financial regulators from across the Pacific in Fiji to discuss emerging FinTech risks, cyber resilience, consumer protection and stronger financial-sector supervision.
NADI, Fiji — Palau’s Financial Institutions Commission participated in a regional meeting and technical workshop focused on strengthening supervision of financial technology, cyber risks and operational resilience in the Pacific.
The FIC joined financial regulators and supervisory authorities from across the region at the 2026 Annual Meeting of the Association of Financial Supervisors of Pacific Countries, held Sept. 7-11 in Nadi. The meeting and workshop were co-hosted by the Reserve Bank of Fiji and the International Monetary Fund’s Pacific Financial Technical Assistance Centre.
The annual meeting brought together central bank governors, financial commissioners and other supervisory authorities to discuss systemic risks, regulatory developments, supervisory priorities and technical assistance needs.
As part of the meeting, the FIC presented Palau’s country report, outlining key systemic risks facing the country’s financial sector, domestic supervisory actions and progress in implementing a risk-based supervision framework. The report also identified the Commission’s development priorities and technical assistance needs.
The annual meeting was followed by a three-day technical workshop covering financial technology, modern banking, consumer protection, cyber resilience and operational risk management.
The FinTech sessions examined the growing separation of financial services into different components, including consumer-facing applications, electronic money and payment networks that can operate independently or alongside traditional banks.
Participants discussed activity-based and risk-based licensing and supervisory approaches for emerging financial services and technologies, including open-banking application programming interfaces, distributed ledger technology, digital assets and tokenized sovereign debt.
Safeguarding customer funds was another key topic. Regulators examined requirements for nonbank digital-wallet and stored-value providers to keep customer funds separate from their own assets through dedicated safeguarding or custodial accounts.
Such requirements are intended to provide legal and operational separation between customer funds and a provider’s assets, reducing customers’ exposure if a provider becomes insolvent and helping ensure safeguarded funds remain available if the provider fails.
The cyber resilience sessions focused on supervisory and examination techniques for information and communications technology risks across the banking and financial services sector.
The sessions emphasized that cyber resilience extends beyond information technology and is also a responsibility of boards and senior management. It was discussed in the broader context of governance, operational resilience, business continuity and financial stability.
Using real-world cyber incident case studies, delegates examined risks involving third-party service providers and technology supply chains, concentration of cloud services and regulatory requirements for reporting significant incidents.
Participants also discussed sector-wide crisis-management exercises as a way to strengthen the financial sector’s ability to respond to disruptions.
Another focus was the establishment of enforceable operational resilience requirements and impact tolerances, including maximum periods that critical financial services can be disrupted.
These measures are intended to help ensure essential services, particularly retail payments and core banking operations, remain available or can be restored within defined timeframes following major cyber incidents, technology failures or disruptions involving third-party providers.
The FIC said its participation in the AFSPC annual meeting and workshop supports its efforts to strengthen supervisory effectiveness, promote the safety and soundness of financial institutions and build institutional capacity to identify, monitor and respond to emerging financial risks in a timely, transparent and consistent manner.
The Financial Institutions Commission is Palau’s prudential regulatory authority responsible for licensing, supervising and examining financial institutions operating in the Republic of Palau.