Banking supervision must adapt to technology – the Observer

The secretary of State of the Treasury, Ricardo Mourinho Félix, argued that the supervision of the banking system will have to be reformed and the use of new technologies of processing of data and information in your benefit."

The ruler, who was speaking at the Bank of Portugal, which hosted today the XXIV Lisbon Meeting between the Central Banks of Portuguese-Speaking Countries, dedicated his intervention at the "phenomenon fintech", referring to the "technological solutions that exploit the possibilities created by new technologies for the management and processing of data and information that they are producing a new paradigm with regard to financial transactions on a global scale".

For Mourinho Félix, this phenomenon "is unstoppable" and the benefits that can arise depend on the "four critical factors": the talent, the technology, demand and policies.

Referring in particular to the need to invest in financial technologies, the Deputy secretary of State, of the Treasury and of Finance stated that "the lusofonia has this scale and of this dimension and, therefore, allows for the development of this technological base".

"our countries have to exploit this strategic dimension. Without a minimum size, the technology-based companies of our countries will always be vulnerable to multinational corporations, having the largest scale, if you can take ownership with the ease of the technological innovations developed by the companies of our countries and extract the value that we, for lack of vision, we don’t take advantage," he argued.

Ricardo Mourinho Félix said, however, that the management of large volumes of information "may also be used by new agents that offer financial services so perverse".

therefore, access to this information and its processing, "they will always be regulated, so as to respect privacy and to prevent the manipulation of the decisions of the agents".

in This sense, the ruler said that the advent of the 'fintech' is to create a new set of companies that provide financial services 'online' that "are on the margin of the authorities policy and supervision", the authorities of fiscal policy, the authorities of industrial policy and competition, be it monetary policy or regulation.

Stressing that the phenomenon of 'fintech' should not be seen as a threat to the financial systems, but as an opportunity," Mourinho Félix defended the need for an "effective regulation and appropriate to the new phenomenon" to ensure that technological innovation "to create value and provide services more comprehensive, and with reduced costs".

in This line, the ruler argued that "the supervision of the banking system and financial markets will also be reformed and the use of new technologies of processing of data and information in your benefit."

For Mourinho Félix, it is still necessary to consider "the role that the interconnection of the financial systems had on the increase of money laundering and financing of terrorism", arguing that "it is fundamental that the technological innovations can also be placed at the service of combating economic crime and terrorism".

"it is up to governments, in close liaison with the regulators and supervisors, reset the legal framework and legal environment in which unfolds the financial activity and to ensure the regulators a framework of action that will allow them to adopt technological and human means capable of responding to the challenges", he concluded.