147 Views

Global regulators neutral on new rules for ‘hyped’ fintech

© Reuters.  Global regulators neutral on new rules for 'hyped' fintech© Reuters. Global regulators neutral on new rules for ‘hyped’ fintech

By Huw Jones

LONDON (Reuters) – Global banking regulators signaled on Monday they were in no rush to adapt their rules to financial technology firms that have begun nibbling away at banks’ markets.

The regulators looked at how fintechs could disrupt banks’ business models by offering payments services, crowdfunding, mobile banks and online trading.

“Despite the hype, the large size of investments and the significant number of financial products and services derived from fintech innovations, volumes are currently still low relative to the size of the global financial services sector,” the Basel Committee on Banking Supervision said in its report on the implications of fintech on banks and regulators.

Analysts have said banks could become irrelevant as fintech firms become the “face” of financial services, a scenario Basel said seems far-fetched.

“A common theme across the various scenarios is that banks will find it increasingly difficult to maintain their current operating models, given technological change and customer expectations,” the Basel report said.

“As a result, the scope and nature of banks’ risks and activities are rapidly changing and rules governing them may need to evolve as well.”

The Basel Committee writes rules for the larger banks operating in all the world’s major financial centers. It looked at risks and opportunities from fintech before considering next if any new rules are needed.

“The fast pace of change in fintech makes assessing the potential impact on banks and their business models challenging,” Basel said.

The regulators themselves should assess whether their staff are being trained properly to keep up with technological changes in financial services, Basel also said.

Regulators have shied away from imposing heavy regulation on a fledgling sector, mindful that policymakers are keen keep their financial centers attractive to upstarts given the potential for jobs and growth they present.

Separately on Monday, Britain’s Financial Conduct Authority and the U.S. Commodity Futures Trading Commission signed an agreement to collaborate on supporting innovation in fintech.

Consultants KPMG has said that new fintech investments fell from $47 billion in 2015 to $25 billion in 2016, Basel said.

Fintech can bring benefits such as wider access to financial services, more tailored banking, and cheaper fees for customers. Basel said. Banks are also fighting back by launching rival mobile banking products and making themselves more efficient.

Risks include the same as those for banks, such as cyber attacks, failing to comply with data privacy rules, and IT glitches.

sponsoredArticle = ‘div-gpt-ad-1466339494851-0’;

Get the best viral stories straight into your inbox!

Don't worry, we don't spam

Latest Posts

Factbox: Trump on Twitter (February 7) – Korea, FBI, Budget
Politics
159 views
Politics
159 views

Factbox: Trump on Twitter (February 7) – Korea, FBI, Budget

WPUser - March 2, 2018

© Reuters. U.S. President Trump delivers speech after touring Sheffer Corporation in Blue Ash, Ohio The following statements were posted to the verified Twitter accounts of U.S. President…

Economics
143 views

President Trump’s Economic Policies Show He’s Still “King of Debt”

WPUser - March 2, 2018

Investing.com - President Trump proudly considered himself the "king of debt" during his days as a businessman, and he has already earned that moniker as president. The…

White House senior aide to resign following abuse charges
Politics
128 views
Politics
128 views

White House senior aide to resign following abuse charges

WPUser - March 2, 2018

© Reuters. FILE PHOTO: Porter hands document to Trump during signing ceremony in the Oval Office in Washington WASHINGTON (Reuters) - U.S. White House staff secretary Rob…

Russia set for rating review by S&P, Fitch, upgrade in prospect
Economics
124 views
Economics
124 views

Russia set for rating review by S&P, Fitch, upgrade in prospect

WPUser - March 2, 2018

© Reuters. View shows Russian rouble coins and banknote By Andrey Ostroukh MOSCOW (Reuters) - Russia may get a long-awaited upgrade to its sovereign ratings this week…

U.S. senators express optimism about NAFTA after Trump meeting
Politics
149 views
Politics
149 views

U.S. senators express optimism about NAFTA after Trump meeting

WPUser - March 2, 2018

© Reuters. Senator Orrin Hatch (R-UT) arrives for a vote after the Senate reached an agreement to end the shut down of the federal government on Capitol…

Sharp increase in reports of sexual assault at elite U.S. Army academy
Politics
157 views
Politics
157 views

Sharp increase in reports of sexual assault at elite U.S. Army academy

WPUser - March 2, 2018

© Reuters. Sharp increase in reports of sexual assault at elite U.S. Army academy WASHINGTON (Reuters) - There was a sharp rise in reports of sexual assault…

Fourth tranche of aid to Greece should be decided on Monday: France
Economics
158 views
Economics
158 views

Fourth tranche of aid to Greece should be decided on Monday: France

WPUser - March 2, 2018

© Reuters. French Finance Minister Bruno Le Maire attends a conference on "Transforming France’s Economy and Completing the Integration of the Eurozone" in Paris BRUSSELS (Reuters) -…

Senate panel sets confirmation hearing for four FTC nominees
Politics
160 views
Politics
160 views

Senate panel sets confirmation hearing for four FTC nominees

WPUser - March 2, 2018

© Reuters. The Federal Trade Commission building is seen in Washington By Diane Bartz WASHINGTON (Reuters) - The U.S. Senate Commerce Committee set confirmation hearings next week…

Australia says open to UK joining Pacific trade group after Brexit
Economics
126 views
Economics
126 views

Australia says open to UK joining Pacific trade group after Brexit

WPUser - March 2, 2018

© Reuters. Australian Foreign Minister Bishop addresses the 72nd United Nations General Assembly at U.N. headquarters in New York By Andy Bruce LONDON (Reuters) - Australia said…

Senate Democrats: Tax cuts benefit shareholders over workers
Politics
71 views
Politics
71 views

Senate Democrats: Tax cuts benefit shareholders over workers

WPUser - March 2, 2018

© Reuters. Sen. Ron Wyden (D-OR) speaks during a markup on the "Tax Cuts and Jobs Act" on Capitol Hill in Washington By David Morgan WASHINGTON (Reuters)…