Financial Crime World

Here is the converted article in Markdown format:

Banks Face Disintermediation Threat as Fintech Revolution Gathers Pace

The fintech revolution is transforming the banking landscape, posing a significant threat to traditional banks’ relationships with their customers. As fintech companies disrupt the financial services sector, banks must adapt to this new “open banking” context and find a balance between innovative technologies and legal compliance.

Consumer Protection: A Critical Concern

Banks are subject to strict consumer protection rules, aimed at ensuring transparency and fairness in all transactions. The Bank of Italy’s Resolution of 29 July 2009 sets out detailed requirements for banks to provide customers with clear information about:

  • Interest rates
  • Fees
  • Other economic terms

Additionally, the Payment Account Directive (PAD) introduced new rules to enhance customer protection and fee comparability.

Regulatory Challenges Ahead

As fintech players continue to evolve, regulatory authorities will need to adapt quickly to ensure an adequate balance between innovation and risk management. The banking industry is also expected to deepen its commitment to sustainable finance, integrating:

  • Environmental
  • Social
  • Governance (ESG) criteria into financial services

Complaints and Enforcement

Banks are subject to complaints from customers, which can be filed with the Banking and Financial Arbitrator (ABF). While ABF decisions do not have direct binding effect on banks, they play a crucial role in ensuring consumer protection. The Italian Antitrust Authority is also responsible for protecting consumers against unfair commercial practices by banks.

Future Changes

Over the next few years, legal and regulatory interventions are expected to address the rapid technological evolution of fintech players. The banking system will need to adapt quickly to ensure an adequate balance between innovation and risk management. Sustainable finance will also become increasingly important as banks aim to integrate ESG criteria into financial services.

Correct on: 8 February 2021