By Daniel Lanyon on Thursday 30 January 2020
The head of France’s central bank gave an upbeat view of the fintech industry’s growing importance in Paris this week.
Disruption in financial services has expanded beyond startups and is now central to the wider banking system, according to François Villeroy de Galhau, Governor of the Banque de France.
France’s fintech scene has somewhat lagged other European countries in terms of development in recent years but has started to gear up more recently. Speaking at the Paris Fintech Forum on Tuesday, the Governor of the French central bank said it is now of systemic importance.
"It [financial innovation] started with fintechs but it is not now only at the margins, but it is at the core of the financial system," he said.
Villeroy de Galhau, who was appointed Governor in 2015 by Francois Hollande and is former COO of BNP Paribas, added that strong trends have meant the whole financial ecosystem was having to adapt to change.
"We strongly welcome the innovation...it brings progress, from the private sector...We consider ourselves as part of the ecosystem and we want to stay ahead of the curve.”
Whilst it is “difficult to predict the future”, Villeroy de Galhau said increased ‘velocity’ of money is an important driver of change.
For example contactless payments. “[These] were zero per cent less than three years ago, now it is 20 per cent. It has really accelerated,” he said.
Secondly, he says neo banks, quoting a study the central bank published one year ago, now make-up one-third of all new accounts opened in France. He said this figure is likely to rise soon.
"These changes peel over from fintechs to the incumbents. This is another acceleration of change."
However, he says openness and safety are key concerns for this “revolution”.
"We strongly welcome the innovation…[it] brings progress, from the private sector,” he said.
"There is a contradiction between openness and safety,” he added.