The Board of the Bank for International Settlements (BIS) announced on Sunday they have approved the establishment of a BIS Innovation Hub to foster international collaboration on fintech within the central banking community complementing the already well-established cooperation within the existing committees.
The Board reported that the goal of the Hub will be to identify and develop in-depth insights into critical trends in technology affecting central banking; develop public goods in the technology space geared towards improving the functioning of the global financial system; and serve as a focal point for a network of central bank experts on innovation. While sharing more details about the hub, Jens Weidmann, Chairman of the BIS Board of Directors, stated:
“The IT revolution knows no borders and therefore has repercussions in multiple locations simultaneously. The establishment of the BIS Innovation Hub will enable central banks to extend their existing collaboration with a view to identifying relevant trends in technology, supporting these developments where this is consistent with their mandate, and keeping abreast of regulatory requirements with the objective of safeguarding financial stability. There are significant economies of scale in such an endeavour, and the BIS is the ideal vehicle to realise them.”
Mark Carney, Chair of the Economic Consultative Committee, also commented:
“There is a new economy emerging driven by changes in technology, demographics and the environment. While the private sector is driving these innovations, their efforts will be more effective if the hard and soft infrastructure of the global financial system support this innovation, promote resilience and level the playing field on which to compete. Central banks have a major role to play. The BIS Innovation Hub will foster collaboration between central banks and, by extension, help the private sector to fully realise these major opportunities.”
BIS then added the Hub will span multiple locations. As a first step toward implementation, Hub Centres will be set up in Basel and Hong Kong, making use of existing BIS facilities. A third Hub Centre will be established in Singapore, subject to the completion of the necessary institutional arrangements, also as part of the initial phase.