Featured Product

    BIS Event on Implications of Financial Innovation for Central Banks

    February 12, 2020

    BIS held its 18th Annual Conference in Zurich, Switzerland, on June 28, 2019. The key issues under discussion were the implications of technological change for the financial system as well as the implications of financial innovation and the meaning of big data for central banks. BIS published the remarks of Claudia Buch, the Vice-President of Bundesbank; Norman Chan, the former Chief Executive of HKMA; and Jon Cunliffe, the Deputy Governor of BoE at the conference. Additionally, it published two working papers that were presented at the annual conference: one paper was on fintech and financial inclusion while the other one was related to behavioral screening by credit card companies.

    The working paper on fintech and financial inclusion offers preliminary evidence and theoretical analysis about the impact of technological progress in the finance industry. The paper investigates whether the rise of fintech has pushed down the unit cost of financial intermediation. The paper then asks whether the potential gains from fintech will have distributional consequences and investigates the role of machine learning and big data. The study concludes that fintech is not only likely to decrease the costs of financial intermediation, but also to create new regulatory issues. It shows that the unit cost of financial intermediation has fallen since the great financial crisis, concluding that fintech has made the financial sector more efficient.

    This paper develops a simple model of robo-advising, showing that the net effect of fintech on welfare crucially depends on the type and size of fixed costs it entails. Based on a model that features a new technology to analyze non-traditional consumer data, it was concluded that big data and machine learning will likely reduce human biases against minorities while eroding the effectiveness of existing regulations. The tentative conclusion is that fintech can bring widely shared welfare benefits but changes in existing policies and regulations are necessary to achieve its full potential. 

     

    Related Links

    Keywords: International, Banking, Insurance, Securities, Fintech, Big Data, Financial Intermediation, Research, Machine Learning, Blockchain, BIS

    Related Articles
    News

    BCBS Consults on Principles for Operational Risk and Resilience

    BCBS is consulting on the principles for operational resilience and the revisions to the principles for sound management of operational risk for banks.

    August 06, 2020 WebPage Regulatory News
    News

    FSI Note Discusses Challenges Associated with COVID Relief Measures

    The Financial Stability Institute (FSI) of BIS published a brief note that examines the supervisory challenges associated with certain temporary regulatory relief measures introduced by BCBS and prudential authorities in response to the COVID-19 pandemic.

    August 06, 2020 WebPage Regulatory News
    News

    HKMA Announces Repayment Deferment Under Payment Holiday Scheme

    HKMA, together with the Banking Sector Small and Medium-Size Enterprise (SME) Lending Coordination Mechanism, announced a ninety-day repayment deferment for trade facilities under the Pre-approved Principal Payment Holiday Scheme.

    August 05, 2020 WebPage Regulatory News
    News

    ESRB Paper Presents Alternative Approach to EBA Stress Test Proposal

    The Advisory Scientific Committee of ESRB published a response, in the form of an Insights Paper, to the EBA proposals for reforms to the stress testing framework in EU.

    August 05, 2020 WebPage Regulatory News
    News

    MAS Announces Key Initiatives to Support Adoption of SORA

    MAS announced several initiatives to support adoption of the Singapore Overnight Rate Average (SORA), which is administered by MAS.

    August 05, 2020 WebPage Regulatory News
    News

    BoE Updates Template and Definitions for Form ER

    BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.

    August 05, 2020 WebPage Regulatory News
    News

    PRA to Extend Temporary High Balance Coverage Amid COVID Crisis

    PRA published the policy statement PS19/20 on the final policy for extending coverage under the Financial Services Compensation Scheme (FSCS) for Temporary High Balance.

    August 04, 2020 WebPage Regulatory News
    News

    EBA Publishes Standards on Disclosure and Reporting of MREL and TLAC

    EBA published the final draft implementing technical standards for disclosures and reporting on the minimum requirements for own funds and eligible liabilities (MREL) and the total loss-absorbing capacity (TLAC) requirements in EU.

    August 03, 2020 WebPage Regulatory News
    News

    EBA Releases Erratum for Phase 2 Package on Reporting Framework 2.10

    EBA published an erratum for the phase 2 of technical package on the reporting framework 2.10.

    August 03, 2020 WebPage Regulatory News
    News

    EC Sets Out Updated Technical Information for Solvency II Calculations

    EC published the Implementing Regulation 2020/1145, which lays down technical information for calculation of technical provisions and basic own funds.

    August 03, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5635