BOSTON (Reuters) - Federal Reserve Bank of Boston President Susan Collins said Friday the U.S. central bank needs to keep a close watch on technological developments in the financial system.

"We must all be attuned to the very real risks and challenges" resulting from technical innovations, Collins said in the text of a speech for an event at her bank.

"The optimist sees potential for a virtuous cycle, with the financial system benefiting from technological advances enabled by innovations, and adapting to changes in the economy - while a more efficient financial system, in turn, can boost economic growth," she said.

Collins did not comment on the monetary policy and economic outlook in her prepared remarks.