With 2019 fast approaching, there’s a lot of speculation about how government regulations will impact fintech and its implementation in the coming year. In countries like India and China, startups are being embraced with open arms while in the United States the approach isn’t as welcoming. Read on to learn more about fintech and the government.
In the first half of this year, global fintech investment reached a recording breaking $57 billion. Fintech firms are booming around the globe thanks to five key features including improving customer experience, offering transparency, improving security, offering maintenance and supervision, and enhancing financial inclusion.
In coming years, we can expect to see fintech move beyond a sole focus on customer experience and develop more innovative products. For traditional financial institutions, incorporating artificial intelligence, cloud, and digital options can help increase their customer base.
Read more here.
With the shift to a Democrat controlled U.S. House of Representatives, fintech companies may experience more scrutiny as members attempt to regulate the growing industry. The Office of the Comptroller of the Currency (OCC) opened national bank charters to fintech companies this year, but only one, Varo Money, applied. As fintech booms, the struggle between state and federal regulations grow.
“What we will definitely see is a hearing announcement from the Financial Services Committee on the topic, and there’s a chance that could lead to some compromise and bipartisan legislation that doesn’t hamstring innovation,” Lindsay Gorman, managing director at Politec Advisories.
Read more here.
Could Fintech Save a Financial Crisis
Heated debates have been taking place around big bank liquidity in the U.S. government. Federal Reserve Vice Chairman for Supervision Randal Quarles insists that lowering a traditional banks liquidity in the event of a crisis won’t impact customers. “There’s still trillions of dollars more liquidity in the system than there was before the crisis,” he said.
During these discussions, Quarles said the OCC would be working with digital banking platforms to ensure liquidity and access to customers during a crisis. Digital banks are accessible at any time via smart device which showcases them as an important option for customers.
Read more here.
A bright spot in the fintech and government discussion is Fintech FinCrime Exchange, a trade group based in the United Kingdom who is connecting fintech firms and law enforcement. The group has expanded to the U.S. following the growth of fintech, and along with it, the increase in financial crimes.
The goal of Fintech FinCrime Exchange is to help law enforcement agencies develop best practices in risk management and demonstrate how to use fintech to support investigations. “When we heard what was going on in the U.K. and the Netherlands, we thought there was tremendous opportunity to really build on that in the U.S.,” said Julie Myers Wood, the CEO of Fintech FinCrime Exchange.
Read more here.
To stay up to date on fintech news, subscribe today.
