FinMin warns of growing risks posed by tech-driven financial services

Published On: July 3, 2019 04:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 3: Minister for Finance Yuba Raj Khatiwada has warned about the growing risks posed by the new and disruptive technologies in financial sector like fintech, artificial intelligence and technology-driven financial services.

Addressing the inaugural session of the 'Conference and Roundtable on Financial Consumer Protection and Education in Asia Pacific' in Kathmandu on Tuesday, he said that the technology-based financial system or services are yet to gain the public's trust in Nepal.

“I worked with the central bank for over 25 years. Still, I am hesitant to do something in the cloud. Is it safe? Is it good? Where should I keep all the information? How do I transact with electronic means? Many people like me do not have that much confidence in technology-driven financial services,” Minister Khatiwada added.

“So we have to see how these disruptive technologies used in the financial sector will work in future. From the mode of payment to medium of exchange, and from cash to card and card to Internet banking, I do not know. Thank god, the virtual currency and cryptocurrency did not work well,” he said. “Still, we have new challenges to cope with to protect consumers. We need institutions, think tanks and regulators who can work to educate people in these issues."

Finance Minister Khatiwada also used the inaugural session attended by over three dozen representatives from financial sector around the world to explain the role of the government in the markets and the condition for interventions.

“Market often does not behave in a rational manner. Balancing the role of the state and the market is the critical issue for discussion these days. We have to balance it. It's not either market or the state. It is both,” he said. “We have to give a level playing field to the market. If the market does not function properly, the state as a guardian has to intervene and that is exactly what Nepal is doing at the moment.”

The Securities Board of Nepal (Sebon), in collaboration with International Network on Financial Education (INFE) under the Organisation for Economic Co-operation and Development (OECD), organized the two-day event that is scheduled to conclude on Wednesday.

A total of 125 participants, including 40 foreign delegates representing regulatory bodies and other organizations from the financial sector including OECD, Securities and Exchange Board of India, and Australian Securities and Investments Commission, are participating the conference and roundtable, according to the organizers.

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