Fintech Benchmarks 2023 brought into sharp focus the escalating conflict between emerging digital currencies and the traditional institutions that control monetary issuance.
A significant proportion of central banks – approximately 73% – identified that their primary hurdle is staying abreast with regulatory obligations related to the surge in novel fintech offerings.
The figure climbed to a staggering 89% within developing economic regions, while the primary worry for central banks in developed economies revolved around upgrading their existing infrastructural systems.
A considerable majority of central banks opined that the creation of central bank digital currencies (CBDCs) would likely heighten cyber security threats (80%).
In the current digital era, the confluence of finance and technology has resulted in a wave of innovative products and services. However, this rapid evolution has presented considerable challenges for traditional financial institutions, especially central banks.
The survey conducted during Fintech Benchmarks 2023 underscored these concerns.
A majority of central banks, equivalent to 73%, have expressed difficulty in ensuring regulatory compliance for these emerging fintech solutions. The challenge becomes even more pronounced in economies still in their developmental phase, with the figure rising to an alarming 89%.
Interestingly, central banks in mature economies have different concerns. Their main issue lies not in regulation, but in the modernization of their outdated systems. These banks are grappling with the task of integrating their legacy systems with the rapidly evolving digital economy.
A critical part of this digital revolution is the introduction of CBDCs. However, the prospect of CBDCs has not been met with universal enthusiasm.
A significant majority of central banks, 80% to be precise, believe that the advent of CBDCs could lead to an increase in cyber threats. This fear stems from the fact that digitization, while offering numerous benefits, also opens up new vulnerabilities for cyber attacks.
