By Kate Flocken, Financial Health Network
For more than 40 years, public policy has been actively promoting financial inclusion and how to enable consumers to have better access to high quality financial services, but the federal and state governments alike have struggled to keep up with the fast pace of change. Last week the Financial Health Network took the conversation straight to the heart of the federal government and hosted a panel with several fintech startups on Capitol Hill. The panel discussed breaking ground with new technologies to better serve consumers, as well as their thoughts on how financial innovation may impact public policy. The conversation centered around dispelling some common misconceptions and exploring the upside potential of fintech for the consumer.
- Strength in partnerships — fintech companies have high interest in partnering with banks rather than disrupting them and these partnerships can benefit both sides. Regulators have a key challenge here balancing consumer protection and innovation
- Challenges in licensing — state by state licensing continues to be a massive challenge. It costs millions of dollars and takes years to do, so only the biggest companies have a chance at success
- Faster payments — improving the speed of payments can ease strain on consumers struggling with cumbersome services that require money transfers
- Access for all — companies are developing tools to improve consumer financial health, and are keenly aware that they must develop platforms that work well for consumers who do not have the latest tech
- Data, data, data — there is high potential for expanding financial inclusion and access, by using data other than credit scores (especially bank account cash flow data)
- Thinking bigger — technology has implications that are broader than the individual consumer. Tools these companies have for working with data have helped take down money laundering and human trafficking schemes
A huge thank you to our panelists — Affirm, Circle, LendUp, Petal, Stripe and moderator Jo Ann Barefoot for putting on a fascinating and enlightening panel! We look forward to continuing this dialogue with all of you. Keep a lookout for further convening throughout the year.
By Financial Health Network on March 29, 2018.