The financial technology sector is a quickly growing and could carry with it ‘systemic risks’ for the banking sector and broader economy. At a recent conference in Germany, the Bank of England’s Governor Mark Carney recognized the efficiency benefits from financial innovation while highlighting the risk it could pose for stable bank funding, credit quality, money laundering, terrorism financing, and data protection.
Carney said in his speech, “The challenge for policymakers is to ensure that fintech develops in a way that maximizes the opportunities and minimizes the the risks for society.” The Financial Stability Board pulls together bank regulators from across the world. The FSB is currently assessing the suitability of existing rules and regulations in regards to financial technology risks. The results of their study will be presented to Group of 20 leaders later this year.
Financial technology has the ability to cause rapid changes in finance with the existence of technologies like mobile phones, the Internet, high speed computing, and machine learning. As most leaders and experts are urging, I too believe the need for proactive regulation is crucial. Any potential risks not proactively managed could spell disasters for today’s interdependent financial system and economy.
http://www.businessinsider.com/mark-carney-on-fintech-and-systematic-risk-2017-1?IR=T&utm_medium=email&utm_source=fintechweeklycom
Do you feel that in using fintech systems our financial records will be less secure due to the possibility that someone could hack in and steal our data without us knowing?
I think fintech systems and financial records definitely face the risk of being hacked and having confidential information exposed. I also believe that with advances in fintech, regulation and security priority will also increase and become more secure.