FinTech firms’ products and services provide benefits that far exceed the risks they pose.
So said Rep. French Hill of Arkansas, chairman of the House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion, during opening remarks delivered Wednesday (Oct. 25) before the hearing, “Modernizing Financial Services Through Innovation and Competition.”
Hill said there must be a balance between both consumer protection and innovation, and consideration must be given to how technology-driven changes affect existing laws and regulations.
However, the benefits exceed the risks, and lawmakers must ensure laws and regulations don’t inhibit innovation, Hill added.
Addressing the committee members and speaking of the hearing, Hill said: “My goal is for members to use the time to better understand the FinTech ecosystem and its evolution from, when we were together four and five years ago, disruption to much more of a sense of collaboration, and how it can deliver products and services that consumers want and can benefit from, and the policy questions that we should be thinking about as lawmakers.”
Hill said “innovation and technology have always been at the heart of financial services.” For example, 50 years ago, there was the launch of the ATM. Today, there are digital assets, quantum computing and greater use of artificial intelligence (AI).
Other FinTech innovations that, like the ATM, have delivered more convenience and service to consumers include earned wage access, bank-FinTech partnerships and buy now, pay later (BNPL) products, Hill said.
“The massive rise in popularity of these kinds of financial products demonstrates that consumers already recognize how these innovations are improving their own lives,” Hill said.
The Wednesday hearing for which Hill delivered these opening remarks will address four pending pieces of legislation: the “Financial Services Innovation Act of 2023,” the “Earned Wage Access Consumer Protection Act,” the “Examining Consumer Choice in Digital Payments Act” and the “Fostering the Use of Technology to Uphold Regulatory Effectiveness in Supervision Act,” according to a memorandum released before the event.
Noting the benefits provided by FinTech products and services, Hill said during his remarks: “That’s why I am excited about the bills attached to this hearing that talk about our regulators, the sandbox innovation centers and our regulators, and their evaluating their own technological prowess.”