As financial technology has the potential to disrupt the banking industry, it needs more regulatory oversight, said Bundensbank President Jens Weidman
As financial technology has the potential to disrupt the banking industry, it needs more regulatory oversight, said Bundensbank President Jens Weidmann in an interview with Reuters (reuters.com).
FinTech uses technological advancements that provide cheap and easy-to-access services. For example, Fintech may over time contribute to speeding clearing and settling, and thus reduce the need for intermediaries, explained Reuters.
However, some experts fear that Fintech is not well-regulated by the banking industry. Bundesbank President Jens Weidmann has expressed concerns over how Fintech would act in times of economic crisis, as Reuters wrote.
“Getting a clearer picture of fintechs’ business activities is essential if we are to better understand whether and in what way they might pose a threat to financial stability”, said Weidmann before Reuters.
He added that the most disruptive potential is believed to be found in blockchain or distributed ledger technology. The latter may allow payment transactions and settlements outside of banking regulations and central counterparties.
Bundesbank has recently launched a project in collaboration with Deutsche Boerse. The goal is to develop its own blockchain-based prototype of a securities settlement system, reported Reuters.
Speaking to Reuters, Weidmann commented that the banking industry needs to research Fintech in order to assess the possible risks.
Antony Jenkins, the former group CEO of Barclays, the UK`s second biggest bank, has also stated that Fintech can soon transform the financial industry.
“I’m predicting that over the next 10 years, we will see a number of very significant disruptions in financial services — let’s call them Uber moments – driven by companies in the Fintech sector.”, he said in an interview with cryptocoinnews.com.
Also, he said that the number of employees in the banking sector will be reduced with about 20 percent, possibly reaching 50 percent, according to cryptocoinnews.com.
It remains to be seen how the traditional banking sector will respond to Fintech`s growing influence.