It has been 10 years since Steve Jobs unveiled the first iPhone. The world has not been the same since. Most of us now live in a world of apps, connectivity and instant access.
Banks have also been partnering with fintech companies to get into the game. In a recent speech, a senior US central banker raised some interesting questions about where banks fit in the fintech stack. “While ‘run fast and break things’ may be a popular mantra in the technology field, it is ill-suited to an arena where a serious breach could undermine confidence in the payments system. Indeed, some of the key underpinnings of consumer protection and safety and soundness in the banking world…sit uneasily alongside the requisites of openness, connectivity and data access that enable today’s app ecosystem,” according to Lael Brainard.
Banks thus have to be careful in using open application programming interfaces (APIs) on the one hand but also embracing innovation on the other. And this is a paradox for bank regulators as well, in India and around the world.