Press Release No. 19/255

IMF Executive Board Discusses “Fintech: The Experience so Far”

June 28, 2019

On June 17, 2019, the Executive Board of the International Monetary Fund (IMF) discussed a paper prepared jointly with World Bank Group (WBG) staff reviewing country and regional fintech experiences as a follow up to the Bali Fintech Agenda.

Background

The Bali Fintech Agenda (BFA) was endorsed last year by the Executive Boards of the IMF and WBG. It lays out key issues to consider in understanding how technological innovation is changing the provision of financial services and what implications these developments have for economic efficiency and growth, financial stability, inclusion, and financial integrity.

In approving the BFA, IMF Executive Directors asked staff to review fintech developments across the membership and consider their implications within the mandates of the IMF and the WBG. This paper responded to this call and took stock of country fintech experiences while identifying key fintech-related issues that merit further attention by the membership and international bodies. It drew upon discussions with country authorities raised in the context of IMF surveillance and capacity development and World Bank Group country work, and the findings of a survey of the membership on their approach to the issues covered in the BFA. It also included an in-depth review of selected fintech topics.

The paper found that while there are important regional and national differences, countries were broadly embracing the opportunities of fintech to boost economic growth and inclusion, while balancing risks to stability and integrity. It identified key areas for international cooperation––including roles for the IMF and WBG––and in which further work is needed at the national level and by relevant international organizations and standard-setting bodies (SSB).

The paper discussed by the Board presented some initial considerations for further work. Staff will, based on guidance received from the Executive Board, continue to analyze fintech-related issues centered around the Fund core mandates.

Executive Board Assessment [1]

Executive Directors welcomed the opportunity to discuss the joint IMF‑World Bank staffs’ stock‑taking of country and regional fintech experiences as a follow‑up to the Bali Fintech Agenda. They appreciated staff’s timely and comprehensive review of this work, which demonstrates the Fund’s role of acting as a global forum for sharing knowledge and experiences. Directors also praised the continued close collaboration between the Fund and World Bank staff within their respective mandates.

Directors broadly agreed that the elements of the Bali Fintech Agenda had informed staff’s work and provided a useful framework for country authorities’ work in this area, helping countries identify the significant potential benefits and challenges that technological innovations may bring to the financial sector and their economy at large. They welcomed the first Fund‑World Bank global fintech survey of policy actions of the membership and noted that the findings confirm that countries are broadly working on building up an enabling environment while balancing risks, especially related to Anti‑Money Laundering/Countering the Financing of Terrorism (AML/CFT) and cybersecurity.

Directors considered that the in‑depth review of selected cross‑cutting issues provided useful information to policy‑makers, as requested by the membership. They broadly concurred that the issues raised may help countries enhance policy deliberations, including with international standard‑setting bodies (SSBs), on developing appropriate frameworks in the legal, regulatory, supervisory and data areas, against the background of accelerating technological innovations.

Directors agreed that several key policy issues would require heightened attention from national authorities and international bodies. These include managing competing policy priorities with the aim of harnessing the benefits of fintech while supporting competition and strengthening financial stability, financial integrity, and consumer protection. Directors also emphasized the importance of other priorities, including building regulatory capacity, strengthening cybersecurity, and enhancing data frameworks. They took note of staff’s analysis on the need to develop new international standards or good practices to support countries in adapting their legal and regulatory frameworks, although some Directors did not see the need for new standards related to fintech beyond what is already under discussion in the relevant international fora.

Directors called on staff to further foster information exchange, knowledge building, and international cooperation, especially in the areas of cybersecurity, AML/CFT, regulatory and supervisory frameworks, and the payment and settlement systems. Directors stressed the need to continue to work closely with relevant standard‑setting bodies, with the aim of promoting financial stability.

Directors encouraged staff to closely monitor fintech developments and further analyze the macro‑critical implications and risks at the country and global levels, taking into account resource constraints. They called for further work to be centered around the Fund’s core mandate of ensuring financial stability and integrity, and orderly evolution of the international financial system in light of fast‑changing fintech developments. A number of Directors encouraged exploring fintech solutions to address the loss of correspondent banking relationships in some member countries. Directors also stressed the importance of further capacity development support and advice in the context of Fund’s bilateral country work. They called on staff to clarify and define the nature and scope of the Fund’s role in fintech issues.