The Next Steps for International Cooperation in Fintech
Opening Remarks by Christine Lagarde, Managing Director, IMF G20 High Level Seminar “Our Future in the Digital Age” Fukuoka, Japan
International Monetary Fund Managing Director Christine Lagarde warned on Saturday that the increasing presence of technology giants using big data and artificial intelligence could cause a significant disruption to the world’s financial system.
The rapid development of financial technology fintech has increased access to cheap payment and settlement systems for low-income households in emerging countries where traditional banking networks are scarce.
But it has raised concern about the increasing dominance of big technology firms in mobile payments, which could force global policymakers to rethink the way they regulate the banking system and ensure financial settlements are executed safely.
“A significant disruption to the financial landscape is likely to come from the big tech firms, who will use their enormous customer bases and deep pockets to offer financial products based on big data and artificial intelligence,”
Lagarde told a symposium on financial technology held on the sidelines of the G20 finance leaders’ meeting in Fukuoka, southern Japan.
While such innovation may help modernize financial markets, they could make the financial system vulnerable such by putting payment and settlement systems under the control of a handful of technology giants, she added.
“Over the last five years, technology growth in China has been extremely successful and allowed millions of new entrants to benefit from access to financial products and the creation of high-quality jobs,” she said.
“But it has also led to two firms controlling more than 90% of the mobile payments market.”
Addressing the pros and cons of financial innovation is among topics of debate at the two-day meeting of Group of 20 finance ministers and central bank heads that began on Saturday.
Support our Blog by subscribing to Vihara here. We welcome your comments at aspirantsabode@viharastudyhall.com
Comments