The International Monetary Fund and World Bank released the Bali Fintech Agenda on Thursday to help countries make policies for financial technology to promote inclusive growth and minimize risk to financial stability and integrity.
IMF and World Bank officials outlined the agenda in a forum at their Annual Meetings that opened this week in Bali, Indonesia.
Indonesian President Joko Widodo spoke at the beginning of the forum about his approach to financial technology.
“Similar to the original internet boom of 25 years ago, we should not trust to regulate these new innovations, but should allow innovation and experimentation to flourish first. That means we should once again approach this big wave of innovation with light touch regulation. And, we should provide safe harbor to those inventors and entrepreneurs,” said Widodo.
IMF Managing Director Christine Lagarde said that fintech offers both opportunity and risk.
“If there is no international cooperation, if there is no adherence to those Bali Agenda key elements, then there is a risk that somewhere, somehow, the regulatory environment will be conducive to an abuse of the system. And will the leak through which unwanted, unnecessary business is being conducted. So, my critical point here is it is not prescriptive. It is not a light or heavy, but it’s a very strong agenda for all countries to actually look at each principle and ask themselves, ‘Am I addressing this issue.’”
Panelists said policy makers need to maintain a balanced approach that enables innovation while limiting challenges to financial integrity, consumer protection, and financial stability on the other. IMF officials said the risks should not prevent countries from realizing the opportunities to make the financial system more efficient and open to smaller businesses.
“It’s also financial inclusion for micro, small, and medium-size enterprises. The same quality of access to finance service as large multinational corporations. Something we don’t have in any of our economies today,” said Mark Carney, Chair, Financial Stability Board.
You can watch the forum and read the full Bali Fintech Agenda at IMF.org.