The IMF Managing Director Christine Lagarde spoke at the G20 High Level Seminar on "Our Future in the Digital Age,” in Japan, about the opportunities and risks presented by financial innovation. She highlighted that many countries are asking for greater international cooperation in fintech and pointed out that big tech firms are likely to lead to a significant disruption in the financial landscape.
Ms. Lagarde announced that a paper will be released later this month to present findings of the IMF-World Bank survey on the fintech priorities. The survey covered IMF member countries, with about 96 countries participating in the exercise. While discussing the preliminary findings from the survey, she highlighted that "countries are asking for greater international cooperation in fintech," with nearly 80% mentioning cyber-security as their most important priority.
She also emphasized that "A significant disruption to the financial landscape is likely to come from the big tech firms, who will use their enormous customer bases and deep pockets to offer financial products based on big data and artificial intelligence. These developments hold out the promise of accelerating inclusion and modernizing financial markets, but raise, in addition to privacy issues, competition and market concentration concerns, both of which could lead to vulnerabilities in the financial system." She added that "This presents a unique systemic challenge to financial stability and efficiency... ." The IMF Managing Director concluded that integrating different national approaches to crypto-assets, non-bank fintech intermediaries, and the governance of data is crucial for harnessing the potential of fintech to promote greater financial inclusion and development. However, we must also "find a way to preserve financial stability and integrity, protect consumers, and increase financial literacy."
Related Link: Speech
Keywords: International, Banking, Insurance, Securities, Bigtech, Cyber Risk, Fintech, International Cooperation, Financial Stability, Systemic Risk, IMF
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