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Innovation can be seen all around us. We use our smartphones for much more than just calling and texting. And electric cars are rapidly going mainstream. The world of payments is no exception. Mobile payment requests, contactless payments and cryptos have become the order of the day. So how do such innovations come about? And how do we make sure we can securely use them?

Why innovation in payments is important

It is important that payments stay in the vanguard of technology, because payments must always be convenient for everyone. This is why mobile payment requests and contactless payments emerged. And the same goes for smartphone and smartwatch payments.                                                                        

We believe such innovations are important, and we welcome firms that discover, test and develop new processes and technologies. This is why, jointly with the Dutch Authority for Financial Markets (AFM), we offer them our assistance in our InnovationHub. Firms can also work with us in our iForum, or exchange views with us and other supervisory authorities in the annual Fintech meets the Regulator seminar.

Fintech and bigtech

It is the fintech (financial technology) industry that comes up with such innovations. Fintech is used by both newly emerging firms (startups) and existing companies, such as banks. A well-known example in the Netherlands is the Tikkie app, which a bank developed to allow users to send payment requests swiftly and smoothly. But increasingly, bigtech firms also venture into the world of finance. ‘Bigtech’ refers to technology giants such as Google, Facebook, Amazon and Apple. For example, Apple offers a wallet that is also popular in the Netherlands. Similarly, Facebook is developing its stablecoin named libra.

DNB and other central banks are studying the possibilities for introducing a central bank digital currency, or CBDC. CBDC is publicly accessible electronic money issued by a central bank.

Read more about the digital euro

Secure payments, now and in the future

If you use one of these smart innovations, you want it to be secure. That is why fintech and bigtech firms need a licence from DNB or another supervisory authority in the European Union (EU) if they want to offer payment services in the EU. Also, they must comply with laws and regulations. These include the revised Payment Services Directive (PSD2) and the General Data Protection Regulation (GDPR). This legislation ensures that payments will remain secure.

Read more about PSD2

The power of fintech – artificial intelligence

Put briefly, artificial intelligence (AI) allows machines, such as robots and computers, to perform tasks that have traditionally required humans. AI is increasingly applied in fintech. Just think of a bank's chatbot, which tells you what to do if you have lost your bank card or helps you take out a loan. This is possible because larger volumes of data, of a higher quality, are available nowadays and these help banks assess risks. Also, AI enables a robot to make connections and recognise complex patterns in large volumes of data. At the same time, we must ensure that AI does not discriminate against certain groups of consumers, and that its processes can always be verified. For this reason, we work in tandem with other supervisory authorities to develop guidelines that prevent discrimination and ensure the processes can always be verified.