Facebook could be perceived as the ‘father’ of current fintech disruptors, characterized by a rather edgy outlook. This is an approach that Mark Zuckerberg and his company had in the first years. This was a rather disruptive philosophy, and although Facebook has since moved on from it, there are other digital giants carrying their torch.
This attitude captures most of the neo-banks’ philosophy. They are trying to challenge the status quo on a daily basis. And of course, the world of banking needs some institutions that would behave in an opposite way – the central banks in that matter.
Central banking is currently required (especially with the pandemic uncertainty) to be the definition of stability and the circumspection bastions. But as they are supposed to be such a monolith, should they not invest in development and innovation?
BIS’ (Bank for International Settlements) head of Innovation Hub, Benoît Cœuré actually believes that central banks have been innovative the whole time. He may be considered as an expert on the matter, as he previously worked for the ECB (the European Central Bank) where he was a member of its Executive Board.
What does Benoît Cœuré have to say?
The Frenchman claims that central banks are innovative, as they have to understand the trends, and changes on the markets, while still having the flexibility needed to tackle the problems and respond to different events. It is the same thing that fintech disruptors do, but with central banks, it would be rather unreasonable for them to ‘dismantle’ or disrupt the system (as they are the ones regulating it).
So the central banks’ innovations really have to orbit around the evolution towards the new future, and not the revolutionary approach to what they are conducting. The best example? The continuous works on the CBDCs.
To read more about how exactly the banks innovate, and tackle current problems, visit Ian Hall’s piece: https://disruptionbanking.com/2021/05/04/as-fintech-gets-hot-is-central-banking-becoming-cool/.