Fintech will pose systemic risk as it grows, warns RBA

The Reserve Bank of Australia has warned that fintech companies will eventually pose a systemic risk if they become big enough and regulators must work out standards to set for the technological change sweeping the payments sector. Reserve Bank assistant governor Michele Bullock  told a conference in China on Sunday that regulators globally were focused on protecting consumers and investors from fraudulent schemes as they sought to balance the need for innovation with security risks. But this would change as the role fintech companies played in the economy increased. She said there would be a need for regulators from different economies to co-operate when setting rules for fintech to standardise regulation. She also said regulators should avoid tying requirements to a particular type of financial institution and focus instead on the function they were providing.

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