13 October 2016
Kazan, October 13. INTERFAX-AFI - "With the development of financial technology the Bank of Russia will have to change the ideology of regulation," stated Elvira Nabiullina, Governor of the Central Bank of the Russian Federation (CB RF), at the Finopolis 2016 Forum in Kazan.
"The demand for standard banking services will last for some time, but it will shift more and more to the clients' demand for new technology. Banks have to be prepared. Whether the banks use the chance to transform or disappear as institutions depends on themselves, I think," said the Governor of the CB.
"There is a fork: will the banks be able to respond to this challenge and integrate technology or will they keep on living with traditional services and saying that they have their client to be focused on. This is a challenge for the banking system and the banks will have to respond to it," she added.
Ms Nabiullina noted that for a regulator, financial technology is the same, "if not a bigger" challenge.
"We are not only a banking system regulator, we are also a financial system regulator. And we have to remember this. What are conventional regulators used to? They are used to understand that their regulation protects rights of the depositors, creditors, at the same time it reduces risks for the financial institutions following the established patterns of the regulation. And now these institutions are changing dynamically, new technology and services appear, conventional regulators are unable to keep up. Thus, paperwork in regulation and supervision increases exponentially," she noted.
"Since the environment changes, the obsolete framework forces us to compile more documents, more restrictions, more regulations. We will have to change the regulation ideology itself, and it is a serious challenge for us," explained Ms Nabiullina.
She stated that regulation should be squared with the scale and risks of the sector.
"Since financial technologies are not so extensive yet, we shall not unleash our regulation force. We shall give new technologies a chance to develop," said the Governor of the CB.
According to her, fair players are interested in a correct regulation of this sector.
"And here we need to change the role. Unfortunately, since we were forced to drive a large number of weak players out of business, some market participants see the CB as a repressive institution. Developing the financial technology we have to adapt the ideology of partnership, and we are ready for this," said Ms Nabiullina.