The BCBS recognises that the emergence of fintech is only the latest wave of innovation to affect the banking industry. Banks have undergone various technology-enabled innovation phases before. However, the rapid adoption of new technologies along with their effect in lowering barriers to entry in the financial services market has fostered the emergence of new business models and many new fintech entrants. These factors may prove to be more disruptive than previous changes in the banking industry, although as with any forecast, this is in no way certain.
This Sound Practices paper combines historical research, analysis of current media and industry periodicals, surveys on BCBS members’ activities, fintech product analysis, and scenario analysis to provide a forward-looking perspective on fintech and its potential impact on the banking industry. Based on this work, the BCBS has identified 10 key observations and related recommendations on supervisory issues for consideration by banks and bank supervisors.
Download The Basel Committee paper on Fintech here http://www.bis.org/bcbs/publ/d415.pdf