FSB has published a report looking at FinTech market developments in the financial system and what that might mean for financial stability. It is generally excited by the possibilities that FinTech offers and says that:
- so far, incumbent financial institutions and FinTech firms have a relationship that is largely co-operative and complementary;
- but there is a rise in “BigTech” firms, which it defines as large, established technology companies, and the arrival of these to the market place could have a bigger impact on competition as they tend already to have large customer networks and to be household names; and
- at the moment, financial institutions do not generally rely on third party data service providers for core operations, but authorities should keep an eye on this.
The report builds on themes that FSB had put on its previous watch list – operational risk, cyber risk and macrofinancial risks arising from increase in FinTech activities.