BIS head advices financial watchdogs to reinforce unity with domestic, global authorities regarding fintech sector

BIS head advices financial watchdogs to reinforce unity with domestic, global authorities regarding fintech sector

- in All News, Regulation
fintech-general

The ongoing fintech revolution requires financial market supervisors and overseers to consider more seriously cooperation with other authorities both on national and international level,  the Bank for International Settlements (BIS) said on Wednesday, citing its general manager, Jaime Caruana.

“A consensus is emerging that technology-driven change is inevitable, and that it brings with it massive potential for disruption,” Caruana said at a GPFI-FSI conference that took place in Switzerland’s Basel. “I believe this will be an overall positive development, although the final balance will depend on, among other factors, how the authorities respond – both at the domestic level and at the global level,” he noted.

On one hand, cooperation on a national level is required since actors in fintech span across various semarket segments, including non-bank financial firms and non-financial firms (tech companies and network operators). This would allow authorities to exploit synergies where appropriate, to fill in the gaps, to balance different interests, and to avoid working at cross-purposes. On the other hand, technology as well as finance now span national borders and cooperation at the international level is essential.

Caruana also proposed financial supervisors and overseers should consider two other issues – the dynamic development of fintech and the importance of capacity-building.
In his view, it is vital to keep up with the latest developments of technologies and learn about their application to finance. This requires, among other efforts, greater engagement and dialogue with the private sector and innovators.

“The further penetration of mobile telephony and internet use, the availability of high-speed computing, advances in cryptography, and innovations in machine learning and data analytics are only some of the elements behind the latest fintech wave. More notably, the revolutionary change is also one of attitude,” according to Caruana.

Given the changes in finance, capacity-building is needed to help supervisors and overseers do their job well.

Switzerland-based BIS, set up in 1930, is the world’s oldest international financial organization, with 60 member central banks, representing countries from around the world that together make up about 95% of world GDP

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