Zbornik Radova Pravnog Fakulteta u Nišu (Jan 2023)
Modern financial technologies and traditional banking
Abstract
Contemporary financial technologies (FinTech) have revolutionized the world of finance, improved the operations of traditional financial institutions and created a new environment in which banks are no longer the only providers of financial services. Today, competition in the banking sector includes banks' competition with new FinTech companies and digital decentralized financial (DeFI) sectors. In the future, the financial sector will generate new technological innovations, trust in traditional (TradFi) and decentralized financial (DeFi) sectors, as well as a new attitude of monetary authorities towards DeFi systems which currently function outside their control. In contrast to banks, the FinTech non-banking sector quickly adapts to new business requirements by offering more functional and cheaper digital solutions. Although DeFi sectors may threaten financial stability and the application of monetary regulation, their development cannot be stopped. Financial regulation is being extended to digital innovations but its implementation in native DeFi systems is almost impossible, unlike centralized (CeFi) platforms whose segments are much easier to regulate. The regulation of DeFi is additionally aggravated by the international nature of the transfer of financial resources through these networks. The best solution may be provided by an internationally harmonized approach to the regulation of the DeFi sector, which is not easy to reach at all. There has been a shift in that direction since 2008. The regulation of banking and financial markets is slowly losing its exclusively national character and increasingly adopting the solutions based on regional and global financial consensuses, which are still not comprehensive. A hard-to-reach consensus is also necessary between monetary authorities at the global level and the creators of decentralized financial sectors.
Keywords
