Highlights of the International Monetary Fund and the World Bank Group paper: The Bali Fintech Agenda
The International Monetary Fund (IMF) published a paper on 11th October 2018 to share with its member countries key issues and opportunities concerning the global development of Fintech. The report, “IMF Policy Paper – The Bali Fintech Agenda”, was prepared in collaboration with the World Bank Group.
As there is a growing international concern about the potential risks for financial integrity linked to the development of fintech, National authorities and institutions have started considering greater international coordination. The Agenda aims to offer a framework to address high-level issues by individual member countries, including in their own domestic policy discussions.
What follows is the LHoFT’s summary of the 43 page IMF paper. We recommend reading the full Agenda to delve deeper into the great insights. We have tried to be brief in the interest of highlighting what we consider some of the salient points and issues.
The considerations of the IMF and World Bank working group are divided into the following 12 key elements:
- Embrace the promise of fintech
- Enable new technologies to enhance financial service provision
- Reinforce competition and commitment to open, free, and contestable markets
- Foster fintech to promote financial inclusion and develop financial markets
- Monitor developments closely to deepen understanding of evolving financial systems
- Adapt regulatory framework and supervisory practices for orderly development and stability of the financial system
- Safeguard the integrity of financial systems
- Modernize the legal frameworks to provide an enabling legal landscape
- Ensure the stability of domestic monetary and financial systems
- Develop robust financial and data infrastructure to sustain fintech benefits
- Encourage international cooperation and information sharing
- Enhance collective surveillance of the international monetary and financial system
The fast paced development of technologies offer new challenges and opportunities for all participants, customers and regulators in the Financial Services ecosystem. Although advances in fintech vary from one country to another, evolutions in financial technology are observed globally.
Financial technology firms present many opportunities but they must be regulated accordingly. The IMF, the World Bank and many national authorities are acknowledging their potential but they are also considering the potential risks posed to the financial system and to its customers.