Reuters reports that the International Monetary Fund (IMF) Managing Director Christine Lagarde has issued warnings over the increasing impact and presence of global tech giants who are using big data, artificial intelligence (AI) and fintech, possibly disrupting the global financial system.
Lagarde, in her address to the G20 finance leaders meeting in Fukuoka, Japan, specifically pointed to the rapid development of financial technology (fintech) resulting in cheaper payment and settlement systems for emerging economies where traditional banking networks are bare.
She said that this development could force policymakers the world over to reconsider the way they see banking and financial settlements should be regulated and made to comply:
“A significant disruption to the financial landscape is likely to come from the big tech firms, who will use their enormous customer bases and deep pockets to offer financial products based on big data and artificial intelligence.”
She admitted that financial markets would benefit from innovation but they could centralize and make vulnerable a small system controlled by a few tech giants: “This presents a unique systemic challenge to financial stability and efficiency, and one I hope we can touch on during the G20, and address in a cooperative and consistent fashion.”
Lagarde said China presents an example of the trade-off between benefits and challenges posed by financial technology, where millions now benefit from access to financial products and high-quality jobs, but where only two firms now control over 90% of the mobile payments market.
The IMF has had its past run-ins with the global community with its views and stance on fintech and emerging technology such as blockchain and crypto. It has its own quasi-crypto called Learning Coin but has warned the Republic of Marshall Islands over plans to launch their own crypto and told Malta there were significant risks of terrorism with blockchain.
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