Basel Committee FinTech consultation: IBFed response

31 October 2017

The International Banking Federation appreciates the opportunity to comment on the consultative document issued by the Basel Committee on Banking Supervision (BCBS) in August 2017: “Sound Practices: implications of fintech developments for banks and bank supervisors” (the Consultative Document).

The IBFed acknowledges that the Consultative Document provides a concise, high-level summary of both the current landscape of technical innovation within the financial services sector, and many of the key important challenges to the business models of banking institutions and non-bank technology companies.

The IBFed wishes to highlight three fundamental points that must inform these policy discussions:

• The business of banking has always included a careful focus on the opportunities and attendant risks of technological change;
• Financial technology continues to evolve quickly and its breadth and impact on jurisdictions is vast;
• A properly balanced approach is required for creating a regulatory and supervisory fintech environment in which both newcomers as well as established businesses can flourish. Governments considering proposals related to fintech should ensure that the policy underlying the existing bank regulatory framework is maintained and that applicable rules are applied evenly and fairly across every entity that provides a financial service, whether it is a chartered financial institution or not.
• Regulators should be guided by a ‘same-services/activities, same risks, same rules’ principle. This would ensure high standards for consumer protection, market integrity and financial stability in a level playing field that supports fair competition and innovation. This is especially true when regulatory gaps can lead not just to competition issues but to safety risks for our society, such as in the case of AML/CTF rules.