In his speech on November 3, 2016 at Chatham House in London, Financial Stability Board (FSB), Secretary General, Svein Andresen noted the “hype” that surrounds financial technology, or fintech, and urged global regulators to actively monitor and act on risks as they emerge.

Much hype surrounds the development of fintech and for regulators it is essential to understand what developments are going to change the way financial markets operate and those that won’t.” –FSB Secretary General Andresen

Secretary General Andresen highlighted the FSB’s progress in considering the implications of distributed ledger technology by working jointly with the FSB’s Committee on Payments and Markets Infrastructure, as well as the impact of peer-to-peer lending and machine learning applications. At the national level, the FSB has examined innovation facilitators – sandboxes, hubs and accelerators to better understand the risks of new financial technology.

Based on the FSB’s investigation into blockchain and other financial technologies, the FSB has identified three elemental promises common to a broad range of fintech innovations: (i) greater access to and convenience of financial services, (ii) greater efficiency of financial services and (iii) a to push toward a more decentralized financial system, in which fintech firms may be disintermediating traditional financial institutions. The FSB believes that these elements could have financial stability implications. However, Secretary General Andersen is not presently concerned that new financial technologies increase systemic risk. For now, the FSB recommends that global regulators continue to monitor potential risks and assess developments in fintech.

FSB Secretary General Andresen’s complete speech at Chatham House in London is available here.