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Alert on bank risks associated with new technologies

Staff Writer | May 30, 2017
The use of information and communication technologies in financial services requires effective regulations to prevent major threats, including cyber attacks, a senior European banking executive stated.
Technology   The regulations should serve for supervision
The fintechs have the potential to improve the efficiency of the financial sector, create better products and reduce costs for consumers, but also generate potential risks and regulatory issues, European Central Bank (ECB) President Mario Draghi said.

According to the expert, the application of the fintechs in the banking and financial branch will require the establishment of different regulations depending on their function, which can range from providing consumer financing to managing payments, among other benefits.

The regulations, he said, should serve for supervision, protection for consumers and to establish prudential requirements to ensure the financial soundness of companies, but in no case should harm the healthy development of technologies, he said.

In his appearance before the European Parliament's Economic Affairs Committee, the official stated that the ECB is monitoring developments in the sector to assess risks and adapt to innovation.

Another priority, he corroborated, is the adjustment of the regulation and the supervision of the companies, guaranteeing the equality of conditions.

In the opinion of the expert, the system must be resilient to cyberattacks, hence the ECB's interest in reinforcing evaluations on the subject, through the stress tests it periodically applies to eurozone banks.