Fintech will pose a systemic risk as it develops, warns RBA

Shanghai | The Reserve Bank of Australia warned that fintech companies will eventually pose a systemic risk if they become large enough and that regulators must develop standards for technological change that sweeps the payments industry.

Michele Bullock, Deputy Governor of the Central Bank In China, on Sunday, regulators focused on protecting consumers and investors from fraudulent schemes, seeking to balance the need for innovation and security risks . But this would change as the role played by Fintech companies in the economy would increase.

"Most of the regulations imposed on financial institutions are aimed at the stability of financial institutions .. fail … this is not the regulators' concern at the present time for fintech, this is not the case. is not what we are going to do: if some of these companies become quite large, there will be systemic problems. "Mrs. Bullock told the Bund Summit on Fintech in Shanghai

She stated that it would be necessary that Regulators from different economies are cooperating in setting rules for fintech in order to standardize regulation.It also said that regulators should avoid binding requirements to a particular type of financial institution and focus rather on the function they provided.

Ms. Bullock said regulators around the world were looking for ways to protect consumers and investors from fraudulent schemes.

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While Initial Coin Offeringings (ICO) were an example of innovation for small businesses looking to start a business, there were examples that were "just fraudulent".

"Regulators can not They must be active and ensure that consumers and investors are protected," Bullock told the conference without giving further details.

"Consumers do not want consumers are victims of fraud "

Earlier, Ms. Bullock pointed to the growing importance of having resilient retail payment systems in a society increasingly without money, which meant that # Failure could threaten the ability of an economy to run smoothly. if the customers were unable to make transactions.

National Australia Bank experienced a national outage at its online, mobile, EFTPOS and ATM services in May, which prevented customers from accessing their accounts. [19659002MmeBullockfaitremarquerquelesbanquescentralesetlesrégulateursaccordenttraditionnellementuneattentionparticulièreauxsystèmesdepaiementdegrandevaleurenraisondelaperturbationsystémiquequipourraitsurvenirencasdepanne”Aveclespaiementsélectroniquesdevenantdeplusenplusimportantslarésiliencedessystèmesdepaiementélectroniquededétaildevienttrèscritiquepourlebonfonctionnementdeséconomies”a-t-elledéclaré19659002] "With people who have less cash, a breakdown in a retail payment system may prevent customers from making transactions: in Australia, for example, a breakdown in a large bank recently meant that its Shoppers customers they did not have money (and many did not do it).

"These kinds of disruptions disrupt commerce and erode consumer confidence in payment systems, so regulators are starting to focus on the operational risks badociated with retail payment systems and the question of knowing if operators and participants meet the appropriate resilience standards. "Ms. Bullock did not explain how regulators might react.

A consistent approach to blockchain and crypto-currency regulation, with some governments such as South Korea cracking down on digital currency

In May, the Australian government was urged to follow in Britain's footsteps and create a new regulator.

A White Paper commissioned by the United States Australian Taxpayers' Alliance lobbying and conducted by RMIT University researchers revealed that existing organisms exist such as the Reserve Bank were not suitable for the regulation of payments. the rapidly changing digital payments industry, because it was not flexible enough.