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DEVLHON Consulting Decodes: François Villeroy de Galhau’s Speech at the Fintech Forum – Paris, October 14, 2024
The speech by François Villeroy de Galhau, Governor of the Bank of France and Chairman of the Prudential Supervision and Resolution Authority (ACPR), at the Fintech Forum on October 14, 2024, addresses several key issues surrounding the intersection of technological innovation and regulation in the French financial sector. Structured around three main themes – continuity, disruption, and challenge – this speech highlights the priorities of the Bank of France and the ACPR in supporting the fintech ecosystem while ensuring effective regulation.
A Continuity: The Commitment of the Bank of France and the ACPR
The first point raised by François Villeroy de Galhau concerns the stabilization of funding for French fintechs after a period of contraction in 2023. Indeed, fundraising reached €560 million in the first half of 2024, compared to €568 million in the same period in 2023, showing relative resilience in the sector despite economic uncertainties and rising interest rates. France continues to lead the fintech market in the European Union, although it lags behind the United Kingdom.
This continuity reflects the ACPR’s commitment to maintaining active communication with fintech players through initiatives such as the “Mon Parcours Fintech” platform, as well as supporting specific innovations, such as the issuance of the first stablecoins in France. The speech also highlights the need for regulatory harmonization in Europe, in response to the challenges faced by fintechs in their international expansion.
Disruption: The Impact of Artificial Intelligence
The second part of the speech emphasizes artificial intelligence (AI) as one of the major drivers of innovation for fintechs. François Villeroy de Galhau acknowledges that despite the exponential progress of generative AI, the financial sector has yet to fully grasp the transformations ahead. He advocates for a proactive approach, affirming that the Bank of France and the ACPR must stay aligned with these technological developments.
The ACPR is ready to take on the role of market supervisor for AI in the financial sector, in line with European legislation adopted in June 2024. This legislation identifies several “high-risk” uses, particularly in credit scoring and insurance pricing. To this end, the ACPR will draw on years of expertise in algorithm auditing and collaboration with various financial sector stakeholders.
A Challenge: Balancing Openness and Trust
Finally, François Villeroy de Galhau highlights the challenge of ensuring increased trust in a rapidly opening digital environment. He mentions several European initiatives, such as the Payment Services Directive (PSD2) and the proposed Financial Data Access (FIDA) framework, which encourage data openness for the benefit of consumers while managing risks.
The Digital Operational Resilience Act (DORA), which will come into force in January 2025, is also emphasized as a key pillar for operational resilience in the financial sector in the face of rising risks, particularly cyber risks. DORA mandates compulsory penetration testing, strengthens third-party risk management, and promotes information sharing among financial entities to better address cyber threats.
Conclusion
François Villeroy de Galhau’s speech illustrates the Bank of France and ACPR’s commitment to balancing innovation with regulation. While fintechs are key players in the digital transformation of the financial sector, they cannot thrive without a regulatory framework adapted to new technological realities, such as artificial intelligence and cybersecurity. The Governor concludes by underscoring the importance of the alliance between innovators and regulators to ensure a modern, resilient, and secure financial system.
Source : file:///C:/Users/devlh/Downloads/2024-10-14_Discours-Forum-Fintech.pdf
