February 19, 2018

BCBS published a paper on sound practices in the context of fintech developments for banks and bank supervisors. The paper combines historical research, analysis of current media and industry periodicals, fintech product analysis, scenario analysis, and surveys on activities of BCBS members, to provide a forward-looking perspective on fintech and its potential impact on the banking industry and bank supervision. The paper suggests that, although the banking industry has undergone multiple innovations in the past, the rapid adoption of enabling technologies and emergence of new business models pose an increasing challenge to incumbent banks in almost all the banking industry scenarios considered during the study.

The paper describes the fintech landscape and examines the implications of the fintech developments for banking systems, bank supervisors, and regulatory frameworks. In addition to the banking industry scenarios, three case studies focus on technology developments (big data, distributed ledger technology, and cloud computing) and three on fintech business models (innovative payment services, lending platforms, and neo-banks). Based on this work, BCBS identifies 10 key implications and related considerations for banks and bank supervisors. BCBS will continue to monitor fintech developments and assess whether and how these implications and considerations should be updated as appropriate. 

 

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Keywords: International, Banking, Fintech, Regulatory Framework, Suptech, BIS