FinTech and Financial Consumer Protection—The Role of Supervisory Authorities, delivered by Lucie Tedesco, Chair of FinCoNet and FCAC Commissioner


Dublin, April 7, 2017

Thank you, Bernard, for your warm welcome.I am thrilled to be here in Dublin, the beautiful city you call home. 

As for this incredible new building, I can see why you were so anxious to move here. If happy workers are effective workers, the bank must be showing a surge in productivity since it relocated.The building is certainly spacious and full of natural light.

Well, you certainly have set an engaging tone for today’s seminar. This is the first step in what I expect will be a day-long process of all of us gathering closer around issues and trends with implications for the well-being of millions of financial consumers.

We each carry with us knowledge and ideas developed within the organizations where we work and the countries where we live. As different as our experiences and contexts might be, there are also commonalities within what we know, think, and believe. 

By establishing FinCoNet, some regulators—including me—essentially formalized a global network that already existed, but less officially. The organization provides a forum for better interaction, sharing and collaboration among supervisory bodies responsible for the oversight of the various national financial consumer protection regimes

To participate in this assembly, some of us have travelled across continents and oceans. From Canada, I have “crossed the pond.” Still others—I think you can guess who—have made their usual commute across the city. 

The history of FinCoNet has been a journey too—a series of efforts and passages to meet the ever-evolving need for consumer protection within the financial services sector. By virtue of our role within this sector, we are driven to keep pace with developments that threaten to undermine the interests of financial consumers. 

In the past decade alone, these have ranged from economic setbacks and crises, to the emergence of increasingly complex financial tools and services. Regulators have been reaching out to counterparts globally for as long financial consumer protection has carried international implications. 

With every generation, our world becomes more and more inter-connected. To be attuned and prepared for real and potential challenges to financial consumer protection, regulators must follow suit. 

Our effectiveness is a measure of our connectedness. 

In 2013, when FinCoNet became a legal entity, the relationships that already existed among regulators worldwide assumed greater potential. I am fortunate to have been involved in this transition. It was then, and still is, exciting to pursue the opportunities available to us as members of this organization. We gained a public profile and, with that, found ourselves positioned to actively increase our membership.

Our strategy is simple: When our international counterparts know about us—the work we do and the benefits of membership—they are keen to participate in FinCoNet as Members, Associates or Observers. 

FinCoNet is a key resource for each of us within our respective jurisdictions and within the world we share. I am happy to report that our strategy is working.

The FinCoNet membership is expanding. Supervisory authorities from Russia and Angola are the newest members of our organization. Though I have already had the pleasure of introducing them to the mission and work of FinCoNet, this is an excellent occasion for all of us to welcome them together. On behalf of all FinCoNet members, welcome and thank you for joining our organization. I look forward to your contributions and to collaborating with you on projects for the benefit of financial consumers everywhere.

I have said it before, but indulge me because I want to say it again now: “FinCoNet’s most significant resources is its very active membership.” Hold up today’s agenda and you will immediately find evidence of this. 

With unwavering focus on financial market conduct and financial consumer protection, we probe head on into the issues. We make it our duty to understand them and to develop approaches to mitigating their risks. 

Discussing crucial issues at events such as this is just one way that FinCoNet members put our mandate into action. The greatest expression of our collective efforts, though, is what we pursue and achieve through our standing committees. 

As most of you know, FinCoNet has four standing committees—each one named for its area of responsibility:

  • Supervisory toolbox
  • Digitalization of high-cost lending
  • Online and mobile payments
  • Practices and tools required to support risk based supervision in a digital age.

Our approach to scoping out research activities and other committee initiatives provides important assurances to all of us associated with FinCoNet. Fairness, transparency and consensus are some of the principles that guide us. 

For instance, if you trace the origins of the 2017 priorities for our standing committees, you will find yourself back in 2015. At that time, we consulted with Members and Observers to get their ideas about key issues for consumer protection. 

After a thorough process involving tallying responses, holding discussions with the Governing Council about options, and reaching our decisions—here we are. 

Today’s seminar is an opportunity for us to delve into the many facets of one of the most impactful developments to emerge within the financial services sector in years.

It was only in 2008, in the wake of the global financial crisis, that companies began ambitiously introducing technology solutions and innovations within the financial sector.  Less than ten years later, it is difficult to consider any aspect of the sector without also considering the impact of fintech.

Fintech is currently growing fastest in the areas of payments, lending, raising capital and investment management. It has become an industry unto itself. Meanwhile, regulators throughout the world are watchful and attentive to fintech’s benefits and risks to consumers. 

It will continue to expand the range of consumer products and services, and drive down their costs. As long as consumers crave the convenience and speed that online and mobile financial technologies deliver, it is impossible to see an end on the horizon to the growth of and demand for fintech. 

Meanwhile there are significant risks associated with the industry—among them financial consumer protection risks. Fintech companies have varying levels of protection in place. Jurisdictions vary in their approach to regulating the industry, to no regulations at all. 

Generally, I think too much regulation stifles innovation and consumer choice. On the other hand, too little regulation leaves consumers at the mercy of new and complex financial markets.

Fortunately, working out this dichotomy is not something anyone here needs to do alone. We are accustomed to discussing complicated matters such as this in an informed and productive way. In our home countries and in the context of FinCoNet, we are fortunate to be involved with active forums where consensus is valued and achievable. 

I have no doubt as supervisors, we will find effective ways to ensure that consumer protection extends across new financial technologies. We will engage consumers themselves in this challenge—by building their awareness of their rights and responsibilities to protect themselves when using financial technologies.

Educating ourselves is by far the best way to prepare for impending developments and for influencing governments. 

So it is on this note—a note that I hope rings true and positively for you all—that I conclude this part of today’s agenda. 

I am anxious to hear from all the excellent speakers who will most certainly advance our knowledge and understanding of fintech and its huge implications for financial consumers everywhere.

Thank you.

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