Most financial regulations address traditional banking, but as the world depends heavily on digital alternatives, banks also have to apply regulatory standards to their digital banking procedures.
FERMONT, CA: The financial services industry is shaking up in large respects by financial technology. While Fintech offers several exciting possibilities, banks also face some difficulties. Fintechs enable banks to square the circle or fix seemingly impossible issues, including the risk of shrinking unviable banks.
The main trend is the data-driven push for economic inclusion that forms the rationale of the government-kicked digital-first economy drive. Migration to digitalization has helped generate more information over the past two years than in human history as a whole. This information has extensive applications including opening credit lines to banks with lesser-known credit score and economic history to people and organizations as well as offering insurance and healthcare services to the poor.
There is no need to reiterate the reality that fintechs has transformed all sections of the commercial industry-whether lending or deposit-taking or dealing in capital markets, asset and wealth management, insurance, investment, money transfer or payments.
Fintechs isn't all about making everyday banking simpler, but it's also about empowering new strata and players financially. Domains such as cyber-security, workflow management and intelligent contracts and so on are gaining traction behind fintech's revolution and have a multiplier impact across industries. Regulations are regarded as variables that impede innovations that lead to inefficient resource allocation and hence, market-driven development. But this adage appears to be rapidly disappearing in its significance in the context of few changing economic landscapes. This is because regulators become innovators themselves. Governments have taken measures globally to facilitate a business ecosystem driven by innovation.
The government's role in disruptive technologies has just begun to play. From tracking and proposing strategies on how the company should function in advocating how company life can be made more accessible for the company, the state's function has experienced a sea shift in recent years. The new ecosystem that supports innovation is bound to set a chain of developments in motion that will surely rock in the future on the marketplace.
Once these initiatives are fully implemented, the dream of the nation's digital-first economy will be a near-neighbouring reality. So get prepared to witness next-gen disruptions from formidable private and public innovators' creation.