Financial Stability Board muses implications from fintech
Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, has issued a report analysing the potential financial stability implications from fintech.
The report aims to identify “supervisory and regulatory issues that merit authorities’ attention”. It has found ten such issues, of which the following three are seen as priorities for international collaboration:
- managing operational risk from third-party service providers;
- mitigating cyber risks;
- monitoring macrofinancial risks that could emerge as fintech activities increase.
“Addressing these priority areas is seen as essential to supporting authorities’ efforts to safeguard financial stability while fostering more inclusive and sustainable finance,” FSB states.
“While there are currently no compelling financial stability risks from emerging fintech innovations given the relatively small size of the fintech relative to the financial system, experience shows that they can emerge quickly if left unchecked”.
The report also highlights potential benefits fintech might bring, such as “greater efficiency, transparency, competition and resilience of the financial system; and greater financial inclusion and economic growth”.
Full report can be viewed here.