He noted the encroachment of FinTech companies into the traditional financial sector, especially through partnerships with banks, as creating more complexity and “de-integration” across the banking sector
Fintech services and digital banking could spur financial risks and crisis, stated a US and bank regulator, the Acting Comptroller of the Currency, according to a report.
In a recent New York conference, Michael Hsu stated, “I believe Fintech and big techs are having a large impact and warrant much more of our attention.”
He noted the encroachment of FinTech companies into the traditional financial sector, especially through partnerships with banks, as creating more complexity and “de-integration” across the banking sector.
“My strong sense is that this process, left to its own devices, is likely to accelerate and expand until there is a severe problem, or even a crisis,” Hsu added.
Hsu also noted, in an effort to provide a seamless customer experience, banks and tech firms are teaming up in ways that make it more difficult for regulators to distinguish between where the bank stops and where the tech firm starts. Furthermore, he noted, bank partnerships with Fin-Tech are increasing because Fin-Tech valuations are falling as financing costs rise.
That could create IT risks around information security and resilience and also raises customer protection issues, according to Hsu.
CIO News, a proprietary of Mercadeo, produces award-winning content and resources for IT leaders across any industry through print articles and recorded video interviews on topics in the technology sector such as Digital Transformation, Artificial Intelligence (AI), Machine Learning (ML), Cloud, Robotics, Cyber-security, Data, Analytics, SOC, SASE, among other technology topics