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IMF Executive Board Discusses “Fintech: The Experience so Far”

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Via IMF (Den Internationale Valutafond)

IMF Executive Board Discusses “Fintech: The Experience so Far”







June 28, 2019















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.

Background

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.

In approving the BFA, IMF Executive Directors asked staff to review fintech
developments across the membership and consider their implications within
the mandates of the IMF and the WBG. This paper responded to this call and
took stock of country fintech experiences while identifying key
fintech-related issues that merit further attention by the membership and
international bodies. It drew upon discussions with country authorities
raised in the context of IMF surveillance and capacity development and
World Bank Group country work, and the findings of a survey of the
membership on their approach to the issues covered in the BFA. It also
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. It identified key areas for international
cooperation––including roles for the IMF and WBG––and in which further work
is needed at the national level and by relevant international organizations
and standard-setting bodies (SSB).

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The paper discussed by the Board presented some initial considerations for
further work. Staff will, based on guidance received from the Executive
Board, continue to analyze fintech-related issues centered around the Fund
core mandates.


Executive Board Assessment

[1]

Executive Directors welcomed the opportunity to discuss the joint IMF‑World
Bank staffs’ stock‑taking of country and regional fintech experiences as a
follow‑up to the Bali Fintech Agenda. They appreciated staff’s timely and
comprehensive review of this work, which demonstrates the Fund’s role of
acting as a global forum for sharing knowledge and experiences. Directors
also praised the continued close collaboration between the Fund and World
Bank staff within their respective mandates.

Directors broadly agreed that the elements of the Bali Fintech Agenda had
informed staff’s work and provided a useful framework for country
authorities’ work in this area, helping countries identify the significant
potential benefits and challenges that technological innovations may bring
to the financial sector and their economy at large. They welcomed the first
Fund‑World Bank global fintech survey of policy actions of the membership
and noted that the findings confirm that countries are broadly working on
building up an enabling environment while balancing risks, especially
related to Anti‑Money Laundering/Countering the Financing of Terrorism
(AML/CFT) and cybersecurity.

Directors considered that the in‑depth review of selected cross‑cutting
issues provided useful information to policy‑makers, as requested by the
membership. They broadly concurred that the issues raised may help
countries enhance policy deliberations, including with international
standard‑setting bodies (SSBs), on developing appropriate frameworks in the
legal, regulatory, supervisory and data areas, against the background of
accelerating technological innovations.

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Directors agreed that several key policy issues would require heightened
attention from national authorities and international bodies. These include
managing competing policy priorities with the aim of harnessing the
benefits of fintech while supporting competition and strengthening
financial stability, financial integrity, and consumer protection.
Directors also emphasized the importance of other priorities, including
building regulatory capacity, strengthening cybersecurity, and enhancing
data frameworks. They took note of staff’s analysis on the need to develop
new international standards or good practices to support countries in
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 the relevant international fora.

Directors called on staff to further foster information exchange, knowledge
building, and international cooperation, especially in the areas of
cybersecurity, AML/CFT, regulatory and supervisory frameworks, and the
payment and settlement systems. Directors stressed the need to continue to
work closely with relevant standard‑setting bodies, with the aim of
promoting financial stability.

Directors encouraged staff to closely monitor fintech developments and
further analyze the macro‑critical implications and risks at the country
and global levels, taking into account resource constraints. They called
for further work to be centered around the Fund’s core mandate of ensuring
financial stability and integrity, and orderly evolution of the
international financial system in light of fast‑changing fintech
developments. A number of Directors encouraged exploring fintech solutions
to address the loss of correspondent banking relationships in some member
countries. Directors also stressed the importance of further capacity
development support and advice in the context of Fund’s bilateral country
work. They called on staff to clarify and define the nature and scope of
the Fund’s role in fintech issues.

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IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Andreas Adriano

Phone: +1 202 623-7100Email: MEDIA@IMF.org






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