Balancing Financial Stability, Innovation, and Economic Growth

The financial services industry is at a modulation point. Directive, globalization and technological advancements have histrionically accelerated the pace of business model transformation, and the potential for product and services unbundling. These forces are creating a need for stakeholders to understand:

• How we define providers of financial services in the future
• Rising openings and the new risk outline of the monetary system stopping from changing technological, regulatory and consumer demands.
• The success of present policies to protect against financial instability.

Economic Balance and Growth aim at the analytical valuation of an old-fashioned of superior importance, namely the consolidation and stabilization of the Hungarian economy between 2010 and 2014. Economic Balance and Growth provides a comprehensive performance of all the new financial policy concepts, inventions and tools that resulted in the success of the Hungarian economy between 2010 and 2014, which was significant from the aspect of economic history as well, achieving fiscal and financial stabilization, and thus creating the fundamental conditions for sustainable growth.

The volume provides a complex evaluation of the stabilization leading to a shift towards growth in a way that it also examines the relevant developments observed in previous decades through the economic policy formula ‘economic balance or growth’. As a result of the sometimes new and innovative measures taken, Hungary has reached an exceptional position in recent years, as its economy is simultaneously characterized by balance and growth, which provides a secure basis for a successful future.

The financial invention can be clear as the act of making and then endorsing new financial tools as well as new monetary technologies, institutions, and markets. It includes institutional, product and process innovation.

Advances over time in the financial instruments and payment systems used in the lending and borrowing of funds. These changes, which include revolutions in knowledge, risk delivery, and praise and equity group, have amplified available credit for borrowers and given banks new and less costly ways to raise equity capital.

Following the economic crisis, many countries are beginning to prioritize financial stability through regulation and seeking to balance such policy priorities with the promotion of inclusive growth, especially in poor countries. Sustained economic sector rearrangement and alteration in Ghana has prospered in generating one of the most vibrant financial services centers in the sub-region. Ghana has therefore seen a significant increase in the number of banks, including pan-African groups, with a rapidly expanding deposit base. While the authorities have continued to work on these challenges, current macroeconomic challenges continue to hamper efforts to lower the cost of credit and to expand access to credit for most small-scale businesses.

This White Paper provides a summary of findings recognized throughout the ongoing Debates and interviews, which at a very high level can be condensed into the following four points:

• Further major innovation-driven change is coming in financial services.
• Joint, concerted action is needed to enable the system to reap the benefits of innovation.
• Managing some systemic risks introduced by this wave of innovation poses challenges.
• The financial services system would benefit from certain tools to achieve greater enablement and risk management.

“Innovation-driven change will overhaul the industry at a time when other strategic drivers including the low-rate environment and the regulatory tightening are still unfolding their impact. Close dialogue between the authorities and the industry will be key to reap the benefits of innovation for consumers while ensuring financial stability” Axel A. Weber, Chairman of the Board of Directors, UBS

“Fintech has great potential but needs to develop in a way that maximizes the opportunities and minimizes the risks. To reach the potential and address the challenges, global regulators may take consistent regulatory approaches across jurisdictions” Eric Jing, Chief Executive Officer, Ant Financial Services Group

“Digital technology footings great promise to expand monetary inclusion, but we must ensure that its growth does not undermine customer well-being or financial system stability.