Fintech companies are searching to revolutionize established banking to pose no prompt risk to the financial systems, despite their growth needs to be discreetly supervised. From app based payment services, crowdfunding, and peer-to-peer lending, fintech companies are searching measures to recreate financial services and grant citizens to omit banks for everything from payments to savings.
However there appears to be no strong desire so far between authorities to draw up regulations for a quickly emerging but still small area. Many financial institutions are seeking to either team up with or buy fintech companies and piggy-back on their know-how, frequently illustrating them in domination. Svein Andresen, secretary-general of the Financial Stability Board said, “it is crucial for the regulators to remain on top of improvements in this area”. Andresen, integrates financial regulation across the Group of 20 economies (G20) and has been studying the profits and risks from fintech.
Much hype surrounds fintech and it was essential for regulators to understand what developments will actually change the way financial markets operate. Most fintech at this stage, have not come to a point where systemic financial system risks are posed, Andresen told a Chatham House conference. Authorities are concious of the need to control seriously and search a balance between acting when the risks begin to rise and allowing new technology to improve. The target of the FSB has been altered to seeking at fintech in large-scale rather than retail markets, and with fintech boosting very fast in some countries.