The Financial Stability Board (FSB) has released a report on the potential financial stability implications of fintech, identifying ten key supervisory and regulatory issues, including:
- the need to manage operational risk from third-party service providers;
- mitigating cyber risks and monitoring macrofinancial risks;
- the cross-jurisdictional compatibility of legal frameworks;
- governance frameworks for big data;
- shared learning between public and private sector parties; and
- monitoring alternative configurations of digital currencies for national financial systems.
While the FSB acknowledged that “there are currently no compelling financial stability risks from emerging Fintech innovations” – perhaps in part due to the small size of the fintech sector – there is still a clear need for increased global cooperation to mitigate any risk that could impede the development of beneficial innovations. Such global cooperation would also provide avenues for authorities to share information and experiences, helping to safeguard financial stability while encouraging innovation.