The pandemic has catalyzed an increase in fintech adoption, creating new risks for regulators to address.
- Fears of infections have pushed financial services to increasingly shift online, and consumers to expect a better digital experience. Sixty percent of respondents have seen an increase in digital payments and remittances since the pandemic’s outbreak. Regulators in advanced economies also reported a 24% increase in wealthtech and insurtech use. As we previously covered in the US and UK, this surge in adoption is expected to persist beyond the pandemic, changing the way consumers access financial services for good. This shift to digital channels is exacerbating certain risks, with 90% of respondents identifying cybersecurity as the main challenge. Other challenges include adequate consumer protection measures and dealing with fraud and scams.
- In response, regulators are launching a flurry of digital initiatives to adapt to the new normal. In September, the European Commission launched its digital finance package, a set of legislative proposals to modernize the European financial sector while ensuring consumer protection and financial stability. And in late October, the US Consumer Financial Protection Bureau asked for stakeholder feedback on potential rules governing consumer access to financial records, ushering in federal-level open banking standards.
Source : BUSINESSINSIDER