The Bank for International Settlements (BIS), a global financial institution owned by reserve banks that aims to support international monetary and financial cooperation and acts as a bank for central banks, notes that as financial technology, or financial innovation and digitalization, begin to transform the financial sector, it also opens up “data gaps” in central bank statistics.
These gaps are created because new financial products and services are introduced, which may not be as easy to examine as more traditional platforms.
“Data gaps are currently prevalent as (internationally comparable) information on fintech is lacking in official statistics. To understand innovation, qualitative information on evolving structures, and harmonized time series are needed.”
The BIS recommends creating a classification of Fintech that covers the different financial market segments of Fintech, as data gaps show that financial technology firms involved in financial intermediation are “not systematically assigned to the financial sector” (as identified by the International Standard Industrial Classification of all Economic Activities).
Intra- and inter-institutional cooperation can be improved once data from different or independent sources is properly linked, the BIS suggests.
“The resulting information set (from properly combining multiple data sources) can usefully be complemented by surveys or compulsory reporting requirements on aspects for which data of sufficient quality are not available from other reliable sources; indeed, the working group (WG) notes that the information available varies from country to country, which can call for flexibly adjusting the various national strategies to construct fintech statistics.”
The WG recommends promoting the global adoption of a “revised classification of economic activites” that’s better able to take into consideration the relevance of Fintech platforms and services.
The WG suggests taking appropriate measures to ensure that the statistical methodologies used to assess the impact of Fintech services follow “sound” professional and scentific standards and requirements.
The WG also recommends developing a well-defined process for monitoring any Fintech-related data issues that may arise. Additionally, the Working Group suggests leveraging established IT innovations and making an effort to improve them, by “promoting technological solutions to facilitate the compilation of Fintech statistics.”