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Fintech regulation: turning a corner

Fintech regulation: turning a corner

The Basel Committee on Banking Supervision has issued a sound practices note (PDF 1.01 MB) on fintech.

The recommended sound practices for banks (and for supervisors themselves) are very high level. However, there is a sense here of a corner being turned, with regulators and supervisors beginning to focus more clearly on what they should do in response to the risks posed by fintech (whereas previous papers from international standard setters have been more in the “wait and see” category).

Most of the sound practices focus on the safety and soundness of banks and financial stability - so the emphasis here is on banks' strategy, risk management processes, control environments and third-party service providers.

Some of the sound practices also touch upon the treatment of customers, product development and approval, and AML. Again this does not extend beyond some very high level generalities, but the direction of travel is clear.

The paper makes extensive use of KPMG's Pulse of Fintech report (see pages 10-12).

To discuss this further, please contact a member of the EMA Financial Services Risk & Regulatory Insight Centre.

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