The executive believes that the current regulation favors technology companies. He also assured that the companies in the branch lend funds without complying with banking regulations.
For the executive president of Santander bank, Ana Botín, it is time to balance the playing field between the banking sector and the technology companies that keep their intention to finance the fintech companies. The executive said that this sector of innovations has a 10-year advantage over banks.
In an opinion piece published Monday in the Financial Times, Botín outlined three challenges for regulators: new guidelines for banks to finance more companies, a transition to make the financial industry environmentally friendly, and addressing the digital revolution.
“Big tech companies are turning into lending platforms without having to comply with most banking regulations. Their role, while still relatively small overall, is showing an increase and a big rate of growth. Last year, the credits of the fintech and big tech reached 795,000 million dollars worldwide, “said Botín, who assured that the COVID-19 pandemic will favor digital actors.
Rethinking the rules of the game would not be giving more advantages to the banks because these institutions would be behind, according to Botín. The executive president of Santander is convinced that the regulation is favoring the fintech companies and not the banking sector, especially on the subject of data management that governs payments.
On this point, he indicated that, according to European Union regulations, banks must provide fintech companies with access to customer data if the latter agrees to provide the information. For Botín, this requirement should apply to data held by all sectors, including technology companies.
The crisis comes from banks, not from bitcoin
The banker explained that the playing field should not tilt in favor of anyone and that the proposals before the European Commission require urgent action. However, Botín pointed out that it is not a question of discarding all the regulations that went to receive effectiveness after the financial crisis of 2008, but the rules need and must evolve.
The 2008 financial crisis that the executive cited happened for various reasons, according to a report by the US Financial Crisis Investigative Commission. The document states that the economic collapse happened due to bankers, politicians, and public officials.
Researchers pointed out in 2009 that the crisis could have been avoided, but that excessive risk-taking by banks and the negligence of financial regulators served as a trigger for the situation to get worse. Since then, new parameters for the financing and capitalization of banks are established now.
The debacle later led to the creation of Bitcoin as a digital system and cryptocurrency. Satoshi Nakamoto’s proposal would serve as an alternate mechanism to eliminate trusted third parties (banks) when carrying out transactions. Currently, bitcoin is an asset valued by investment funds, banks, and institutional capitals.
By: Jenson Nuñez.