IMF Executive Board Discusses “Fintech: The Experience so Far”
IMF News, June 28, 2019
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- IMF Executive Board Discusses “Fintech: The Experience so Far”
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- Published: June 28, 2019
Background
- On June 17, 2019, the Executive Board of the International Monetary Fund (IMF) discussed a paper prepared jointly with World Bank Group (WBG) staff reviewing country and regional fintech experiences as a follow up to the Bali Fintech Agenda.
- The Bali Fintech Agenda (BFA) was endorsed last year by the Executive Boards of the IMF and WBG. It lays out key issues to consider in understanding how technological innovation is changing the provision of financial services and what implications these developments have for economic efficiency and growth, financial stability, inclusion, and financial integrity.
- The paper:
- Responded to IMF Executive Directors’ request that staff review fintech developments across the membership and consider implications within the mandates of the IMF and the WBG.
- Drew upon discussions with country authorities raised in the context of IMF surveillance and capacity development and World Bank Group country work.
- Incorporated findings of a survey of the membership on their approach to issues covered in the BFA.
- Included an in‑depth review of selected fintech topics.
- The paper found that while there are important regional and national differences, countries were broadly embracing the opportunities of fintech to boost economic growth and inclusion, while balancing risks to stability and integrity.
- The paper identified key areas for international cooperation—including roles for the IMF and WBG—and areas where further work is needed at the national level and by relevant international organizations and standard‑setting bodies (SSB).
Key Findings from the Board Discussion
- Directors welcomed the joint IMF‑World Bank staff stock‑taking of country and regional fintech experiences as a follow‑up to the Bali Fintech Agenda.
- The Bali Fintech Agenda provided a useful framework for country authorities’ work, helping countries identify potential benefits and challenges from technological innovations in the financial sector and the broader economy.
- The first Fund‑World Bank global fintech survey of policy actions confirmed that countries are broadly working on building an enabling environment while balancing risks, especially related to Anti‑Money Laundering/Countering the Financing of Terrorism (AML/CFT) and cybersecurity.
- The in‑depth review of selected cross‑cutting issues provided information to policy‑makers to help enhance policy deliberations, including with international standard‑setting bodies (SSBs), on legal, regulatory, supervisory and data frameworks amid accelerating technological innovations.
- Directors concurred that several key policy issues will require heightened attention from national authorities and international bodies, including:
- Managing competing policy priorities to harness fintech benefits while supporting competition and strengthening financial stability, financial integrity, and consumer protection.
- Building regulatory capacity.
- Strengthening cybersecurity.
- Enhancing data frameworks.
- Directors noted staff’s analysis on the need to develop new international standards or good practices to support countries adapting their legal and regulatory frameworks, although some Directors did not see the need for new standards related to fintech beyond what is already under discussion in relevant international fora.
Policy Recommendations and Next Steps
- Directors called on staff to further foster information exchange, knowledge building, and international cooperation, especially in:
- Cybersecurity.
- AML/CFT.
- Regulatory and supervisory frameworks.
- Payment and settlement systems.
- Directors stressed the need to continue working closely with relevant standard‑setting bodies with the aim of promoting financial stability.
- Directors encouraged staff to closely monitor fintech developments and further analyze macro‑critical implications and risks at the country and global levels, taking into account resource constraints.
- Further work should be centered around the Fund’s core mandate of ensuring financial stability and integrity, and the orderly evolution of the international financial system in light of fast‑changing fintech developments.
- Specific areas Directors encouraged:
- Exploring fintech solutions to address the loss of correspondent banking relationships in some member countries.
- Providing further capacity development support and advice in the context of the Fund’s bilateral country work.
- Clarifying and defining the nature and scope of the Fund’s role in fintech issues.
- Staff will, based on guidance received from the Executive Board, continue to analyze fintech‑related issues centered around the Fund core mandates.
Contact and Administrative Details
- Press Release No. 19/255
- June 28, 2019
- IMF Communications Department
- MEDIA RELATIONS
- PRESS OFFICER: Andreas Adriano
- Phone: +1 202 623-7100
- Email: MEDIA@IMF.org
- [1] An explanation of any qualifiers used in the summing up can be found here: http://www.imf.org/external/np/sec/misc/qualifiers.htm.
Summary based on IMF press release “IMF Executive Board Discusses ‘Fintech: The Experience so Far’” (June 28, 2019).
