How fintechs can improve women’s lives
IMF head Christine Lagarde discusses the future of fintechs at the industry meeting of financial technology – and emphasizes the importance of regulation.
Every year, the world of the future gathers in the 200-year-old Paris stock exchange ‘Palais Brongniart’. With 220 participating company directors, more than 150 fintechs and participants from 60 countries, the Paris Fintech Forum is the largest in Europe.
Right at the beginning of the forum, a particularly important panel will be held: ‘The Future of the Financial World in Times of Fintech: New Opportunities, New Risks and New Challenges’ The head of the International Monetary Fund (IMF), Christine Lagarde, discussed with BBVA chief Carlos Torres Vila, Kabbage President Kathryn Petralia and Governor of the Swedish Central Bank, Stefan Ingves, on the challenges of Fintechs.
Lagarde vividly told her what the opportunities for new technologies are: ‘The fight against violence against women.’ She had met a woman in Peru in her late fifties. Man and almost all children had lost her through terrorism. She bred guinea pigs and sold them. Without a mobile phone and payment card, she would not be able to handle her business safely. ‘New technologies in finance can change people’s lives.’ Foreign workers could also have a lower cost of transferring their money through mobile phones to their families in their home country.
Cyber attacks are the biggest risk
One must promote the digital financial world, in order to create growth. It could also help where the traditional banking system does not work as well as in stable economies. However, Lagarde emphasized that, above all, regulation was important to Fintech.
The role of politics should not be neglected, the state must create security for financial transactions. ‘In the US or China, fintech certainly has other implications.’ There is a risk of data stability. In China, for example, you barely use any cash, everything is completely digitalized. ‘Data can also be a means of control.’
Stefan Ingves sees fintech from the point of view of the central banks: ‘It is important to ensure that the financial system is secure. We have to understand the rules and play an active role. The main question with changes must be: ‘Is it good for society?’
The new direction of the financial world requires the question of the values and here also the policy is in demand. Central banks must regulate how society should function when it comes to money.
Carlos Torres Vila sees many opportunities for new technologies, including ‘Women in Poverty’. His bank has invested heavily in fintech. The new technologies also make it easier to track ‘suspicious activity or terrorism’. However, one must find a solution for the exchange of private data, even in Europe, it was not agreed. Data and their exchange are an important value for the future.
Kathryn Petralia also sees the new technologies positively: ‘New people have access through better products, especially women and small businesses. They often feel more comfortable on anonymous websites than people in a bank. ‘Five or ten years ago that was not possible, there was not enough data.
‘The new technologies promote the global economy and create jobs,’ she emphasized. However, she fears that too aggressive regulation prevents new actors from installing or developing.
Everyone agreed that the biggest risk of fintech is the cyber attacks, which the big tech players have to reduce. It takes enough people to watch everything, Ingves says. Lagarde emphasized: “Politicians need to work closely with the private sector.” It needs regulation, otherwise they lose the race with the technology, but that is expensive, but this money is necessary to invest: ‘We must provide security and stability.’