Lael Brainard, a member of the Board of Governors of the Federal Reserve System ("FRB"), described how the agency is "well-positioned" to shape emerging financial technology ("fintech") innovation. In a speech delivered at the Conference on Financial Innovation, Ms. Brainard discussed the potential for fintech to "transform the way that financial services are delivered and designed, as well as the underlying processes of payments, clearing, and settlement." She described the possibility of expanding access to credit and other financial services for consumers and small businesses. She reported that the FRB is monitoring a growing fintech segment called "regtech" that aims to help banks achieve regulatory compliance more effectively.
Ms. Brainard said that the Federal Reserve is currently engaging with a wide range of market participants to better understand the risk associated with various technological changes. She described cooperation with multiple regulators to promote consistency of approaches and alignment of supervisory requirements. She stated that the agency "recognize[s] the value of technical expertise," and has established a multidisciplinary working group that is engaged in a 360-degree analysis of fintech innovation to evaluate impacts on financial services delivery, policy and supervision.
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