German G20 Conference : “Uniform regulatory regime needed for fintechs”
G20 conference « Digitising finance, financial inclusion and financial literacy » took place at the Deutsche Bundesbank on January 25th. The conference addressed the key question of “how can we harness the benefits of digitalisation and simultaneously mitigate the riks it involves.”
In his welcoming remarks, Dr Jens Weidmann, President of the Deutsche Bundesbank, underlined the German G20 Presidency objectives, the opportunities and risks of digital finance, and the potential impact of digital finance on financial stability.
The 3 priorities set up by the German G20 Presidency are:
Strengthening the resilience of national economies;
Shaping digitalisation;
Promoting investment, particularly in Africa.
Dr Weidmann pointed out the rapid growth of digital finance and fintech industry, the opportunities related to it but also the potential risks. For Dr Weidmann, “uniform regulatory regime is needed for fintechs”. He stated that it would be wrong for “fintechs to base their business models on regulatory loopholes”.
In addition, the development of digital finance and therefore an easier access to financial services for all go together with the need of basic understanding of financial concepts: financial literacy is crucial. However, according to the last survey on adult financial literacy competencies, commissioned by the G20 and published by the OECD, the overall levels of financial literacy is still relatively low.
For Mr Weidmann, the development of digital finance needs to take into account as well cyber risks. The damage of cyber-attacks goes beyond the financial loss: it can “undermine peoples’s trust in the financial system”.
