The Irving Fisher Committee on Central Bank Statistics (IFC) of BIS published a report that examines the implications of fintech for central bank statistics. The review conducted by the IFC Working Group on Fintech Data Issues finds that, as fintech transforms the financial sector, it also opens up data gaps in central bank statistics by introducing new financial products and bringing existing services to a larger market. Data gaps are prevalent as (internationally comparable) information on fintech is lacking in official statistics. In this context, the report presents a targeted roadmap to construct fintech statistics and presents recommendations for building the internationally harmonized fintech statistics.
The presented roadmap consists of the following six steps:
- The first one is to formulate a classification of fintech that encompasses the various financial market segments of fintech, as data gaps reflect that fintech companies engaged in financial intermediation are not systematically assigned to the financial sector (as identified by the International Standard Industrial Classification of all Economic Activities or ISIC)
- Second, based on this definition, lists of fintech enterprises can be derived from various sources (for example, existing studies, registers).
- Third, linking these lists to existing data in official statistics (for example, balance sheet data) will help to answer economic questions about fintech and allow a more comprehensive understanding of its potential development.
- Fourth, intra- and inter-institutional cooperation shall be fostered, as data from different sources need to be linked, calling for active support of the related international initiatives that are underway (for example, to promote global identifiers).
- Fifth, available data from the internet can be sourced (for example, through artificial-intelligence-supported web search).
- Sixth, the resulting information set can usefully be complemented by surveys or compulsory reporting requirements on aspects for which data of sufficient quality are not available from other reliable sources; the working group notes that the information available varies from country to country, which can call for flexibly adjusting the various national strategies to construct fintech statistics.
The report points out that some central banks are already producing statistics based on new reporting requirements. For example, Bank of Finland has set up new peer-to-peer and crowdfunding statistics. To satisfy the demand from national users for stability analysis and after the Ministry of Finance collected data for 2014–16 to support legislation, Bank of Finland launched an annual collection of crowdfunding and peer-to-peer lending statistics in 2018 and gained further experience over a period of two years. The lessons learned from this are that demand and interest in these new data exist, even though volumes are still low; rapid market developments and emergence of new players make it challenging to keep up with the reporting population; time investment is needed for reporting agent cooperation; experimental statistics can be set up in a cost-effective manner; and profiles of new funding channels are significantly different from traditional bank lending data. Based on its analysis, the Working Group recommends that central banks should:
- Promote the global adoption of a revised classification of economic activities that better takes into consideration fintech service providers
- Ensure that statistical methodologies used to measure fintech activities adhere to sound professional and scientific standards
- Develop a comprehensive process to continuously monitor the situation and address fintech-related data issues that may arise
- Leverage existing IT innovation and accelerate it by promoting technological solutions to facilitate the compilation of fintech statistics (for instance, by making resources available internationally by sharing IT tools through the BIS Innovation Hub
Related Link: Report (PDF)
Keywords: International, Banking, Insurance, Securities, Fintech, Statistics, IFC Working Group, Irving Fisher Committee, Artificial Intelligence, Data Gaps, Regtech, BIS
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