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Report assesses fintech implications on FIs
A new report from the Financial Stability Board (FSB), of which Federal Reserve Governor and Vice Chairman for Supervision Randal Quarles is chair, assesses the potential impact fintech companies and third-party service providers will have on the global financial system.
NAFCU acknowledges that fintech can produce real benefits to consumers, including increased speed, convenience and new product offerings that make it easier for them to manage their financial lives. However, the association has urged lawmakers and regulators to ensure a level playing field between fintech companies and financial institutions, from data security to consumer protection.
The NAFCU Board met with Quarles in November to discuss the association's 2018 Report on Credit Unions, which includes the intricate relationship between credit unions and technology.
The FSB report notes the positive impacts technological innovation can have on financial institutions, including increased access to services, more product offerings, greater convenience and lower costs.
Key considerations from the FSB report include:
- to date, the relationship between incumbent financial institutions and fintech firms appears to be largely complimentary and cooperative in nature;
- the competitive impact of established technology companies, such as Amazon and Google, may be greater than that of fintech firms as they have large, established customer networks and name recognition and trust; and
- reliance by financial institutions on third-party data service providers for core operations is estimated to be low at present, but warrants ongoing attention from regulators.