Regulators need to tighten reins on fintechs

THERE are no signs of real haste from global regulators in keeping financial technology (fintech) firms in further check. Yet, it may be time for regulators here to expand their supervisory scope, as large fintech firms start to stake a claim on financial services in Southeast Asia.

The Basel Committee on Banking Supervision has signalled that it believes fintech firms pose little threat to stability for now. "Despite the hype, the large size of investments and the significant number of financial products and services derived from fintech innovations, volumes are currently still low relative to the size of the global financial services sector," it said in a report in February.

Yet, that assessment may be incomplete. As DBS chief Piyush Gupta noted this month, the one per cent of the fintech community represented mostly by the large Chinese players such as Alibaba and Tencent, are a more potent force than the 99 per cent of fintechs that will likely end up collaborating with banks given the high customer ac…