Financial technology empowers consumers to manage their money better, helps small businesses and entrepreneurs start, run, and scale businesses, and expands access to investment tools and advice, all while creating a more fair, inclusive, and equitable financial system for all. Washington must enable this transformation, not slow it down. That starts with modernizing policies and regulations to reflect the current state of financial services and give consumers and businesses the financial tools for success.
Expanding access to financial services
Technology-driven innovation fills the gaps left by traditional financial services, giving consumers and businesses lower-cost and easier-to-use alternatives to legacy products. Fintech companies use digital platforms and modern technologies to drive competition that increases access to credit, banking, and capital, all helping create a more inclusive and equitable financial system.
Securing the open banking infrastructure
Financial technology relies on giving consumers the right to control their data and access simpler and more convenient financial services and products. Yet, the concept of open banking operates without clear rules of the road from the federal government. Many benefits that consumers enjoy today – from overdraft protections to loan serving and fraud monitoring – could be undermined without clear guidance from the Consumer Financial Protection Bureau.
Enabling faster and more secure payments
Technology-driven financial companies provide faster, easier-to-use, more transparent, and lower-cost payments services. Yet, leading players in the payments industry lack access to the most seamless and frictionless ways to deliver payments services, like Federal Reserve accounts and services and FedNow. Regulators can modernize the nation’s payments systems to usher in an era of faster payments for consumers, small businesses, and the economy.
Encouraging broad chartering authority
State and federal regulators have broad chartering authority and should exercise that authority with new entrants, including fintechs, seeking the advantages and benefits a charter may confer. Chartering results in heightened regulatory oversight and greater financial services competition. Supporting this option for fintech is sound policy that recognizes the constant evolution of the business of banking.
Increasing access to capital markets
Financial technologies expand access to investment tools and advice, enabling participation in markets traditionally reserved for the wealthy. Fintech is also helping companies and their investors manage their capitalization tables, valuations, and investments, all with the aim of creating more owners. Modernizing the definition of an accredited investor and supporting healthy, robust, and accessible primary and secondary markets will help more Americans build wealth and save for retirement.
Advancing the responsible use of AI/ML
Technologies like artificial intelligence and machine learning (AI/ML) can help lower costs, increase efficiency, and expand fairness in the financial system When built and used properly, AI/ML helps financial technology companies drive competition in the marketplace that ultimately benefits consumers through increased access to credit and other financial services.