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
Previous ArticleG20 Publishes Communiqué on Its June Meeting in Japan
Next ArticleEBA Single Rulebook Q&A: First Update for June 2019
MAS and Temasek jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin, which focused on building a blockchain-based multi-currency payments network prototype.
PRA published a public working draft, or PWD, of version 1.2.0 of the BoE Insurance XBRL taxonomy, along with the related technical artefacts.
CPMI published a report that sets out nineteen building blocks for a global roadmap to improve cross-border payments.
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
APRA updated the lists of the Direct to APRA (D2A) validation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
PRA updated the statement that provides guidance to regulated firms on implementation of the EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis.
EBA updated the 2019 list of closely correlated currencies that was originally published in December 2013.
ESMA published the final report on the guidelines on securitization repository data completeness and consistency thresholds.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.