Template-Type: ReDIF-Article 1.0

Author-Name: János Müller
Author-Workplace-Name: Hungarian Banking Association
Author-Email: mullerj1@t-online.hu

Author-Name: Ádám Kerényi
Author-Workplace-Name: Institute of World Economics, Hungarian Academy of Sciences
Author-Email: kerenyi.adam@krtk.mta.hu

Title: The Need for Trust and Ethics in the Digital Age – Sunshine and Shadows in the FinTech World

Abstract: In the wake of the international financial crisis, digital financial and FinTech services
have emerged as part of the fourth industrial revolution. These services, which
are generally supported and welcomed by consumers, have now reached a stage
where they are able to disrupt traditional financial structures. In the past, the role
of FinTech startups was considered marginal and risk-free both by banks, which
were busy restoring trust and optimising their operations, and by regulators and
supervisors. However, as they have spread at a revolutionary pace, FinTech now
entails several types of risk to financial stability and represents a serious threat.
In order to address potential problems relating to financial stability, the need has
emerged to regulate FinTech at the national and international levels, including the
management of the body of data accumulated and used by FinTech companies.
A situation has evolved in which three requirements should be met internationally
and nationally: support for digital FinTech processes; a level playing field for
incumbent banks and FinTech/BigTech companies; and the regulation of FinTechtype
services at the international and national levels. Except for the first, these
requirements have not been met to date, and expectations and codes of ethics and
trust have gained prominence as workarounds. For that reason, the focus of our
analysis is the importance of the requirements for trust and ethics in the banking
sector, and the extent to which these requirements are enforced in the FinTech
world. We present why it is becoming necessary to introduce codes of conduct,
ethical standards and the exercise of due care in behaviour in order to build trust.

Classification-JEL: D74, G21, O33, N74
Keywords: trust, ethics, banks, FinTech, artificial intelligence, Regulatory Sandbox
Pages: 5-34
Volume: 18
Issue: 4
Year: 2019
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-18-4-st1-muller-kerenyi.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:18:y:2019:i:4:p:5-34