In the nick of time - A Framework for Fintech

In what is probably one of the last acts of the outgoing US administration, the National Economic Council published a policy document setting forth objectives and principles to underpin the development of the fintech sector.

While it remains to be seen how much of the framework will be taken forward by the incoming administration and, maybe more importantly, how any aspects of the framework will be translated into concrete actions, it is very instructive and useful as a big picture summary of the fintech landscape as seen from the official sector in the US.

The stated policy objectives are

  • Foster positive financial services innovation and entrepreneurship
  • Promote safe, affordable and fair access to capital
  • Strengthen financial inclusion and health in the US and abroad
  • Address financial stability risks
  • Further a 21st century financial regulatory framework
  • Maintain national competitiveness

The principles that will underpin the policy objectives are

  1. Think broadly about the financial ecosystem
  2. Start with the consumer in mind
  3. Promote safe financial inclusion and financial health
  4. Recognize and overcome potential technological bias
  5. Maximize transparency
  6. Strive for interoperability and harmonize technical standards
  7. Build in cybersecurity, data security and privacy protections from the start
  8. Increase efficiency and effectiveness in financial infrastructure
  9. Protect financial stability
  10. Continue and strengthen cross-sector engagement

A very first reading of the framework immediately highlights two major undercurrents:
i) weariness about the range of risks associated with a scaled up fintech sector and
ii) clear preference / hope(?) for a “harmonious”, incumbent led adoption of fintech.

What is your take?

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