The Basel Committee on Banking Supervision today published a consultative document highlighting the implications of fintech for the financial industry. With more than half of regulatory authorities considering new fintech-related regulations or guidance, the committee published 10 key recommendations for banks and bank supervisors to address the challenges of fintech.
Specifically, the committee recommended that banks take a balanced approach to innovation that considers the safety and soundness of the banking system; ensure that they have effective governance structures, risk management and IT processes in place; establish appropriate processes for monitoring third-party risk; and cooperate with regulators to develop appropriate standards for banking services delivered by both banks and fintech companies. The recommendations also emphasize the importance of collaboration between bank regulators. For more information, contact ABA’s Rob Morgan.