The rise of financial technology — more commonly known as fintech — won’t threaten the existence of banks along with also which’s the responsibility of authorities to make sure which traditional lenders are prepared for alterations in their industry, policymakers along with also regulators said in a CNBC-moderated panel Thursday.
The comments were made in Bali, Indonesia where the International Monetary Fund along with also the globe Bank are holding their annual meetings. The two organizations on Thursday jointly launched a paper, the Bali Fintech Agenda, to help policymakers around the globe strike a balance between encouraging financial innovation along with also safeguarding the stability of the system.
CNBC’s Geoff Cutmore moderated a panel discussion in Bali to discuss the contents of the paper. He asked the panelists whether which’s a not bad idea to allow fintech firms to “cherry pick” profitable segments of the banking industry to operate in — therefore taking money away through a legacy system which’s built up over decades along with also has weathered financial crises.
which question, according to Bank of England Governor Mark Carney, is actually akin to asking “whether which’s a not bad idea to protect the banks through serving consumers better?”
Carney, who was one of the panelists at the event, said many little along with also medium-sized enterprises within the U.K. face high costs in tapping the formal banking system for funds. Therefore, reaching those businesses through fintech is actually “not taking liquidity away, which’s providing brand new liquidity” into the financial system, he said.
The key is actually to ensure which technological transformation within the financial industry can bring about the maximum benefit along with also at a minimum costs, which is actually a “classical problem” which many policymakers face, said Sri Mulyani Indrawati, Indonesia’s finance minister who was also a panelist.