Ladies and gentlemen,
I am very pleased to welcome you all to Paris, for this conference on technological innovations in payments and, more generally, in the financial system. Representatives from a wide range of stakeholders, from market to regulatory spheres, are here today and I have no doubt that this variety of backgrounds will make the discussions fruitful. Before leaving the floor to the speakers and panellists, I would like to share with you a few thoughts on three challenges raised by digitalisation, from the perspective of a central banker.
Payments are often viewed as a very technical and incidental activity, and sometimes even just as a matter of “plumbing”. And yet they are crucial for our economy and for central banks. For the Banque de France, payments are of the essence in all our three missions – what we call the “3 Ss”: monetary strategy, financial stability and economic services.
Given the importance of payments in many aspects of our economy, we need a comprehensive strategy. Most importantly, innovation should be spurred, whether it comes from start-ups or incumbents. This is exactly the purpose of the French national strategy for retail payments – consistent with the European framework. This French strategy was developed last year through a cooperative process: it aims at modernizing payments, by relying on the dematerialization of processes in different fields, such as e-invoicing, e-mandates for SEPA Direct debits, virtual wallets, etc. The implementation of this strategy has been entrusted to the National Committee for Payments (CNPS), your co-host for this conference, which gathers representatives from both the supply and the demand side and is chaired by the Banque de France.
Going beyond the sole payments sphere, innovation in the financial sector can generate significant benefits that have to be reaped. It has the potential to foster financial inclusion all over the world, as long as people are provided with internet access. It also prompts incumbents to adapt, pushing them to develop new business models and new activities that ultimately benefit the customers. In this regard, let me highlight the initiatives to develop instant payments in the SEPA area, to facilitate market-based funding and equity financing in the European Union. I would like also to mention that the Banque de France is conducting its own experiments, with the recent creation of a Lab and the appointment a Chief Digital Officer, Thierry Bedoin, who will moderate the first panel of this afternoon’s session.
Innovation brings new threats for the financial system that have to be carefully dealt with:
This implies first rethinking the regulation so as to strike the right balance between innovation and security. Several objectives have indeed to be met: maximizing the spillover effects of innovations, protecting the consumer and addressing financial stability issues, and ensuring that innovation is beneficial to all parties, in particular in the form of new services and costs reduction. Such a balance can only be reached through adequate and proportionate rules, based on the risk profile of the service provided and not on the nature or the legal status of the provider. This principle has guided European authorities in the review of the payment services directive, which will be thoroughly discussed during this afternoon’s session.
On top of these regulatory changes, technological innovations reinforce the need for fruitful dialogue and cooperation between all parties concerned. At the French level for instance, this is the purpose of the “Fintech Forum” launched in July last year by the French prudential supervision and resolution authority, the ACPR, in coordination with the French Financial Markets Authority. The continuous dialogue between regulators, supervisors and companies will ensure that innovations are properly understood, that the necessary changes in regulation are identified in a timely manner and that information flows appropriately between stakeholders. We have also committed the Banque de France and the ACPR to a gradualist and proportionate approach in the regulation and supervision of Fintechs. We think it is still more appropriate than a “sandbox”, which could create threshold effects. At the European level, cooperation between all stakeholders has been enhanced in the field of payments, so as to prevent market fragmentation. This is the central role assigned to the Euro Retail Payments Board. Later on this morning, Yves Mersch will give us further insights into the work of the ERPB.
Allow me now to conclude briefly by expressing again my gratitude to all the speakers, panellists and participants who are present today to share their thoughts on a wide variety of subjects of topical interest. I wish you extremely fruitful discussions throughout the whole day. Thank you for your attention.