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Global Consortium of Central Banks: Regulators Must “Invest With Urgency” In Fintech Supervision, Regulation
August 2, 2021
WASHINGTON – The Bank for International Settlements today released a new report warning of the significant risk to the global financial system posed by the lack of sufficient regulation and supervision among leading technology firms, which increasingly are offering financial products and services to consumers.
In response to the report, Consumer Bankers Association President and CEO Richard Hunt, said:
“This report makes clear – as the financial industry rapidly evolves, leading regulators must ensure the same level of consumer protections to new market participants as well-regulated and well-supervised banks. Failure to do so will harm America's financial system and the consumers we are all working to serve. It is well past time for regulators to protect all consumers regardless of where they go to meet their financial needs.”
As news outlets reported:
“Global watchdogs are increasing wary that the huge amounts of data controlled by groups such as Facebook, Google, Amazon and Alibaba could allow them to reshape finance so rapidly that it destabilizes entire banking systems.[…] The entry of big techs into financial services gives rise to new challenges surrounding the concentration of market power and data governance,’ the BIS paper published on Monday said.” – Reuters, “Financial regulators urgently need to get a grip on 'Big Tech' – BIS”
“Apart from financial risks and consumer protection, the presence of big techs in financial services raises questions about data governance and antitrust matters, the paper said, which could lead to a ‘systemic footprint in the financial system. Current rules in place to deal with issues such as credit and liquidity risk may fall short in regulating fintechs, the organization said, highlighting the need for central banks to work more closely with competition and data privacy government agencies.” – Wall Street Journal, “Fintechs Need to Be Regulated More Like Banks, Says Report From Global Regulator Group”
“Among the potential risks BIS cited were fears that the firms' dominance could lead to higher payment costs for merchants and consumers as well as concerns around privacy and data protection on a systemic scale.” – Politico, “Global finance regulators call for tech industry oversight”
To learn more about today’s report from the Bank for International Settlements, click HERE.