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.
Keywords: International, Banking, Fintech, Regulatory Framework, Suptech, BIS
PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).
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EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.
EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.
PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.
MAS published a statement guidance on dividend distribution by banks.
APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.
FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.
EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.
SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.