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Empowering financial authorities with RegTech
Financial authorities all around the world are facing unprecedented challenges.
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Illustration of fin-tech. (Shutterstock/File)
F
inancial authorities all around the world are facing unprecedented challenges. While the aftermath of the financial crisis in 2008, which triggered the comprehensive transformation of financial supervision, has yet to be fully comprehended, the fintech revolution is coming. And it brings another profound complexity, raising questions over whether current regulatory frameworks are still relevant.
To appreciate this complexity, it is useful to understand what fintech is and how its existence can disrupt even the way the central bank operates. The Financial Stability Board (FSB) defines fintech as “technology enabled innovation in financial services” and the implementation of this definition in the real world is much wider.
The rapid advancement of digital technologies has seen business opportunities and markets, which until recently were known to be too costly and less appealing for established financial institutions, to be more financially rewarding to explore.
The newly founded startups that tap these markets are called fintech firms, which use various technologies to make their products and services more efficient, automated, interconnected and reachable.
