FSB Watching Fintech Developments

Following an announcement last week from Apple that it will begin offering a credit card, Financial Stability Board (FSB) Chairman Randal Quarles said fintech is among the international body's top priorities this year, along with nonbank financing and evaluating too-big-to-fail reforms.

Quarles, who is also a Federal Reserve governor and vice chairman for supervision, was speaking at an event Thursday hosted by the European Central Bank.

On fintech, Quarles said it's changing the way people obtain financial services and has many promises; however, "regulators must ensure that as we maximize the potential benefits in the development of fintech we minimize the potential risks and costs."

Quarles indicated FSB has begun examining "the potential effects from the entry of large technology firms into financial services and potential effects from the growth in decentralized financial technologies."

Quarles' full speech is available here.

FSB released a report earlier this year assessing the potential impact fintech companies and third-party service providers will have on the global financial system. While the FSB report notes the positive technological innovations for financial institutions, it also said the issue warrants ongoing attention from regulators.

CUNA and the state leagues acknowledge that fintechs can offer consumer benefits including increased speed, convenience and new product offerings that make it easier for them to manage their financial lives, but the trades have urged lawmakers and regulators to ensure a level playing field between fintech companies and financial institutions.