##ing from this synergistic collaboration between the regulated entities and fintechs with huge future potential. benefits from fintech 1 / 6 bis - central bankers'speeches 6. technology has reduced entry barriers and allowed fintechs to enter the financial services. more importantly, it has allowed the unbundling of financial services in a manner that is economically viable even at a lower scale of operations. in turn, consumers have benefited by better customer experience and convenience. payment sector innovations in india is a typical example. 7. one of the key value propositions that fintechs offered was providing the same financial services as regulated entities but at a lower cost. fintech disruption in the indian brokerage industry is a shining example of this. 8. large technology companies, or big techs as they are popularly called, such as alphabet, meta, amazon, etc. have also expanded into financial services. these companies leverage the data from their large existing user base coupled with network effects to provide contextualised or embedded financial products along with nonfinancial products. in many jurisdictions, in addition to payment systems, big techs have successfully expanded into credit scoring and lending. risks from fintech 9. irrespective of the type of player undertaking financial business or the type of technology underlying it, it is prone to a few fundamental sets of risks. a. for regulated entities or new entrants, depending on the business model, they face legal, reputational, governance, and operational risks in addition to the usual credit, market, and liquidity risks. b. from customers'perspective, key risks include mis - selling, discrimination, data privacy and security. c. from a regulator's perspective, there are risks associated with financial stability, market integrity and customer protection. 10. we monitor and calibrate our regulatory and supervisory response across these risk areas. however, new entrants and new technologies can further aggravate these risks. for example, fintechs operating on lending side have spurred the availability of unsecured loans, globally. such loans are often driven by machine learning models. however, effectiveness of these models for delinquency has not been fully established, especially during an economic downturn. any significant failure of these models will not only be limited to new entrants but will also impact regulated entities with exposure to them. 11. use of models also brings the question of fair treatment in the extension of credit. it is necessary that highly

jens weidmann : climate change and central banks welcome address by dr jens weidmann, president of the deutsche bundesbank and chairman of the board of directors of the bank for international settlements, at the deutsche bundesbank ’ s second financial market conference, frankfurt am main, 29 october 2019. * * * 1 welcome ladies and gentlemen, allow me to bid you a warm welcome to the deutsche bundesbank ’ s second financial market conference, on my own behalf and that of sabine mauderer, here at the gesellschaftshaus in frankfurt ’ s green haven, the palmengarten. frankfurt ’ s most charming park, the palmengarten was created 150 years ago, and a series of events have been scheduled this week to commemorate this anniversary. when adolphe, duke of nassau, was forced to disband his collection of exotic plants housed in schloss biebrich in 1866, heinrich siesmayer, a frankfurt garden designer, came up with a clever idea – he set up a stock corporation to buy the plants and build a botanical garden in frankfurt. city folk snapped up the shares in this company, allowing siesmayer to buy duke adolphe ’ s green treasures for a price of 60, 000 gulden. 1 i suppose you could say that the foundation of frankfurt ’ s palmengarten was an early example of “ green finance ”, given that it was a privately funded green investment. but there is more to green finance than that, of course. it is a term that also includes accounting for climate risks in the financial sector, or the transition to a greener financial system. if environmental concerns are joined by economic and social sustainability considerations, it is common to use the term “ sustainable finance ”. 2 and that is what today ’ s conference is all about : sustainable finance. judging by the huge turnout, i dare say we ’ ve really got our finger on the pulse. we want this conference to be a forum for dialogue among representatives from the financial industry, academia and the public sector. government is hugely interested in growing a sustainable financial sector, as you can see from the fact that not one, not two, but three finance ministers are in attendance. and incidentally, the palmengarten was more than just a private initiative – the city of frankfurt provided the land needed to build it. 2 climate risks and central banks 2. 1 financial stability ladies and gentlemen, the need to transition to a low - carbon