Christine Lagarde the Managing Director of the International Monetary Fund (IMF) said a few hours ago that the presence of technology giants using Big Data and AI could eventually disrupt the financial system. Virtual currencies and blockchain technology are helping new individuals have access to the financial market.
Christine Lagarde Talked About Fintech Potential
Financial technology has helped increase the number of individuals that now have access to the financial world, specifically those who are considered of being part of the low-income world. In general, in these regions of the world, banking services and networks tend to be scarce.
This has also raised some concerns regarding the increasing dominance that bit technology firms have in mobile payments. This is going to be affecting policymakers and how they think new regulations for the banking system.
At a symposium on financial technology held on the sidelines of the G20 finance leaders’ meeting, Lagarde Commented:
“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.”
The financial markets could be modernized through this innovation and it could make the financial system vulnerable. Technology giants could start dominating the new settlement systems.
One of the companies that are currently thinking of issuing a cryptocurrency for payments and transactions is Facebook. The new digital asset seems to be called GlobalCoin and it is expected to be launched to the market in the near future. However, there are some critics of this digital currency because they claim that Facebook is just going to have more information about the financial behavior of millions of individuals around the world.
Moreover, in China, there have been several individuals that entered the market and it created several high-quality jobs. Nonetheless, there are just two firms that control more than 90% of the mobile payments market, according to Lagarde.