DANA TOLICI

FGDB, Romania

Title: The Role of Deposit Guarantee Schemes (DGS) in the Age of FinTech: Ensuring Stability and Trust in the Financial System

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Biography

Daniela Tolici is an Organizational Strategist with a rich professional journey spanning over 20 years. Throughout her career, she has been dedicated to enhancing organizational performance through strategic business planning, change management, and sustainable development. Currently serving as Advisor to the Director of Romanian Bank Deposit Guarantee Fund, she strives to establish and prioritize business objectives while offering invaluable insights into strategic matters. Her expertise lies in organizational development, with a keen interest in sustainability, gender diversity, and best practices within the financial sector. Her academic journey includes an MBA from the University of Wales, UK, and a PhD Diploma in Knowledge Management. Additionally, she shares her knowledge and passion for Change Management and Organizational Development as an Associate Professor at the NUPSPA University, Bucharest, Romania. Daniela firmly believes that a collective effort can make a lasting impact and shape a future where organizations thrive while embracing positive change and diversity.

Abstract

This study explores the evolving role of Deposit Guarantee Schemes (DGS) within the context of FinTech innovations, focusing on enhancing supervision capabilities, risk management, and depositor protection in a digital banking environment. Traditionally, DGS have been crucial in maintaining financial stability by protecting depositors and preventing bank runs. However, the rapid adoption of FinTech solutions and big data analytics necessitates significant adaptations in DGS operations. Specifically, this study aims to examine the responsibilities and capabilities of DGS in protecting depositors within a FinTech-driven banking environment. This involves understanding how traditional responsibilities of DGS are being challenged and transformed by FinTech advancements. Additionally, the study discusses how FinTech innovations can enhance the effectiveness and efficiency of DGS operations, including exploring the potential of technologies such as AI, machine learning, and blockchain to streamline DGS processes and improve their operational efficiency. Finally, it analyzes the impact of digital banking trends on the traditional roles of DGS by evaluating how trends like digital banking, mobile payments, and neobanks are reshaping the landscape of deposit insurance and what adjustments are necessary to ensure continued depositor protection. The findings reveal that FinTech innovations significantly enhance the operational effectiveness and risk management capabilities of DGS by enabling real-time risk monitoring, improving transparency through blockchain, and automating routine tasks. However, these benefits come with challenges, including regulatory and compliance issues, cybersecurity threats, and the need for effective stakeholder collaboration. Regulatory sandboxes, robust cybersecurity protocols, and continuous dialogue with regulators are recommended to address these challenges. Moreover, adapting coverage policies to include digital assets and enhancing protections for mobile and online banking users are essential for maintaining depositor confidence. Data-driven innovations such as the ESAP and PSD2 review can enhance supervisory capabilities, ensuring that DGS remain responsive and proactive in a dynamic financial environment.