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Immediate Teamwork on Financial Technology Risks

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Immediate Teamwork on Financial Technology Risks

Leading Economic executives called on banks, regulators and new start-ups to cooperate to secure of fintech innovation doesn’t pose a fundamental risk in industry. The association of chairmen and chief executives from some of the world’s biggest financial establishments, investors and regulators, said “Technology-enabled innovations bring a new set of risks to the financial system, both conduct and prudential. The financial industry said “is at an inflection point” due to technology development, regulatory uncertainty and the present macroeconomic environment. That supply a trend towards cutting out the mediator parts handled by traditional banks and produced a modern playing field to gain clients.

The statement also said risks from newcomers, the industry requires to be secure that traditional financial company or staff do not take additional risks in their competition to preserve clients. Steering committee associations includes Douglas Flint HSBC chairman, Michael Bodson US clearing house DTCC CEO, John Cryan Deutsche Bank co-CEO, Axel Weber UBS chairman, Carsten Kengeter Deutsche Boerse CEO and David Serra Algebris Investments CEO. Fintech or Financial technology, is increasing rapidly and can support cut costs, develop risk management, expand risk and upsurge competition across banking. But it also needs to be observed and attach, the association said. It said “There is an immediate need both for the private sector and financial supervisors to teamwork” to support competition among traditional company and newcomers, “at the same time protecting system stability in light of technological progress.”

Six parts of possible risks marked by the association contains a better warning of industry misbehavior, like greedily algorithmic trading activity, and warning to the safety of data, especially from hacking and other forms of cyber threat. The other four parts marked are possible failure to clients from new sources of financing, such as peer-to-peer loan; market electronification like elevated frequency trading; modern payments systems; and regulatory arbitrage, if uncertain remedy of modernization allows some company to decrease through the regulatory cracks. The document said governments, supervisors and the private sector nowadays need to review a number of issues, as well as explaining the boundaries that conclude which client’s data can be used for business reasons.

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