The Basel Committee on Banking Supervision has indicated that it is not rushing to implement new rules for financial technology firms that are posing potential challenges to banks.
In a report on the implications of fintech on banks and regulators, the committee said: "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."
The report summarizes results from the work of a task force set up by the committee to provide insight into how technological changes could impact banks' business models, and what the implications are for bank supervisors.
The regulator noted that the scope and nature of banks' risks and activities are rapidly changing and the rules governing them may also need to evolve as they will struggle to keep their current operating models in light of financial technology innovations and customer expectations.
However, it said that, currently, the scenario that banks would become irrelevant as fintech firms become the "face" of financial services appears to be far-fetched.