The World Economic Forum (WEF), the organization behind the Davos conference, has issued a paper calling for more discussion about fintech and financial institutions.

“This publication represents the first time that incumbents, financial supervisors and fintechs have come together collectively to address the present wave of technology-enabled transformation in the financial services sector,” said Matthew Blake, head of banking and capital markets at the WEF.

“Traditional financial institutions no longer control the entire value chain, a trend which has effectively created a battleground for ownership of the end consumer,” notes the paper which was developed by Oliver Wyman, the consultancy. “Use of technology in finance is not new,  nor are many of the products and services that are offered by new entrants to the sector. Rather, it is the novel application of technology and its speed of evolution that make the current wave of innovation unlike any we have seen before in financial services.”

The paper is full of feel-good generalities whose vagueness makes them unobjectionable but not very useful.

New technologies offer greater efficiencies and also bring new risks, according to the WEF paper, citing “an urgent need both for the private sector and financial supervisors to collaborate and identify actions that can be taken to understand how best to maximize societal utility from these opportunities.”

It offers a survey of changes in the business and mentions some specific risks  — marketplace loans may shift risk to the end consumer in ways investors may not fully understand. In capital markets it mentions high-frequency trading, dark pools and algorithms where the WEF seems late to the party on these issues which have been debated for years. “…this remains an area of intense scrutiny,” it adds rather unhelpfully. And it calls for many safety factors to protect data while also warning that enhanced risk analysis could be used to deny services to an individual.

Key recommendations include beginning a debate on ethical use of data; public-private dialogue on transformation through a global forum  “particularly to identify areas where supervisor support is needed to develop technology for enhancing stability.”

Recommendation 3 is to approach standards for monitoring and understanding technology-enabled innovation. Here the vagueness reaches new heights.

“The international supervisory community should define a set of standards for internal capabilities required to ensure that national supervisors are well-equipped to monitor and mitigate against risks arising from technology-enabled innovation.”

Who is this international supervisory community? And is there some possibility that incumbents might try to use supervision to stop innovation? Or that individual countries within the international community might differ on their views of innovation?

The fourth recommendation, for proactive standard setting to “create industry standard-setting bodies that redefine and enforce standards of good conduct in light of new technology-enabled innovation,” does offer an actual example — the Hedge Fund Standards Board.

The WEF paper may be a start toward addressing some of the issues arising from fintech development, but it’s a weak one.