Kuroda: Fintech Firms Could Seriously Disrupt Banking Industry

Speaking at the event most-beloved by conspiracy theorists and conspirators, the World Economic Forum in Davos, the Governor of the Bank of Japan (BoJ), Haruhiko Kuroda, said that Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term companies could change the way regulators look at the financial services industry.

According to Reuters, the BoJ governor said that new technology companies entering the financial services industry are taking a different approach to banks. Instead of providing loans and bank accounts, he noted, many of these firms are focusing exclusively on settlement and payment solutions.

"We tend to think that these big tech companies are making a disruptive impact on the banking system," Kuroda said. "[They] may disrupt the banking sector in a serious way. How to deal with this situation, that is a very difficult question."

Given that 'disruptor' and 'disruption' have been transformed into positive phrases by the corp-speak bullshitters of the technology world, many in the fintech space, if they aren't smiling smugly at the idea of 'disrupting' an industry, are probably wondering why Kuroda would be concerned by their behaviour.

Kuroda - no Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term, big problems

Fortunately for us, Kuroda did explain himself. He said that, as most regulation concerns itself with traditional banking, many of these new companies are entering uncharted territory - and, if there's one thing regulators don't like, it's uncharted territory.

The BoJ governor said that, without proper rules governing them, these new fintech firms could cause economic problems for advanced countries. Those economic problems could, in turn, lead to major political problems.

“Financial crisis," he said, "tends to create not just financial and economic problems, but political instability.”

Along with his fellow central bank governor, Mark Carney of the Bank of England, Kuroda also said that cyber security will be a growing challenge for financial regulators.

“In [the] coming years," said Kuroda, "probably this cyber-risk issue would be the most serious kind of risk and we have to carefully study and think about ways to strengthen the system against any cyberattack,”