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Who said it?: “Our focus is the Fin, not the Tech”

“Our focus is the” Fin “, not the” Tech “, says Ewald Nowotny, governor of the Oesterreichische Nationalbank (OeNB) on Monday at the fintech conference in Vienna. From the 28th to the 29th of January, OeNB, the Federal Ministry of Finance and the International Monetary Fund (IMF) come together to present the fintech action plan. The Bali Fintech Agenda policy paper was prepared in October 2018 by the IMF and the World Bank in Bali, Indonesia, to promote new technologies in the financial sector.

“Cryptocurrencies will not replace traditional currencies”

Fintechs will drive many changes in the financial sector, said the Austrian currency guardian before experts from Europe and Asia. Nowotny sees the role of national banks as a neutral adviser. “We are protectors of financial stability.” The opportunity for Fintechs lie in the retail sector. “New technologies can support but not replace traditional financial institutions. Cryptocurrencies will not replace traditional currencies.

“1.7 billion do not have access to financial services”

With the conference in the OeNB’s cash register hall, the IMF holds the first of five international events within the framework of the Bali agenda in Austria. The financial market chief of the IMF, Tobias Adrian, wants to exploit the “full positive potential of Fintechs”. A big advantage is financial inclusion in regions with weak infrastructure. “It is estimated that there are 1.7 billion adults without access to financial services in the world,” said IMF chief executive Christine Lagarde on the Bali fintech agenda. Fintechs offer payment and easy access to credit, Adrian explained. The German-American calls Kenya as an example. There, new technologies have revolutionized the financial process.

If financial services are provided largely by fintechs and not by banks, the question arises as to the legal framework. “Do we need regulation?” Decision makers should use the fintech action plan to develop a suitable national fintech strategy. The focus could be created differently depending on the state, says the German-Americans.

The financial industry is changing at a rapid pace because of technology. 70 percent of financial institutions invest in cryptocurrencies or will do so in the future, Adrian quotes a survey by the IMF. Austria is a good example of how to prepare for the coming challenges.

Regulatory sandboxes help with the regulatory problem

Finance Minister Hartwig Löger wants to push ahead with the digitization of the financial market with the recently launched Fintech Advisory Board. The Advisory Board will develop a number of initiatives in the future.

“There is no single definition of financial instruments,” says Harald Waiglein, head of the economic policy, financial markets and tariffs section of the Treasury. “As a financial instrument you have to comply with the regulations of the financial market regulation (Mifid II). If you are not a financial instrument, you are in unregulated space. ”

This concerns especially the area cryptocurrencies. Even if cryptomarkets were regulated under Mifid II, it would be problematic to apply the regulation. Finally, Mifid II has been tailored to regulate traditional banks, says Waiglein, who also chairs the Board of the European Financial Stability Facility (EFSF).

One solution is “Regulatory Sandboxes”, as Trending Topics reported. Here is the approach: “If there are problems with the law, change the law, but seek no way around Regulatory sandboxes around.” Austria is in the midst of development. The state has been selling government bonds since 2 October 2018 using Blockchain. “We wanted to try the new technology to see if it adds security benefits,” Waiglein said.

Published inFintech

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