Noting the rapidly changing banking landscape, the Office of the Comptroller of the Currency (OCC) has announced it will establish an Office of Financial Technology next year.
The new office will include the existing Office of Innovation, which the OCC established in 2016, and will build upon its efforts to support “responsible financial innovation,” the OCC said Thursday (Oct. 27) in a press release.
“Financial technology is changing rapidly and bank-[FinTech] partnerships are likely to continue growing in number and complexity,” Acting Comptroller of the Currency Michael J. Hsu said in the release. “To ensure that the federal banking system is safe, sound and fair today and well into the future, we need to have a deep understanding of financial technology and the financial technology landscape.”
The Office of Financial Technology will provide strategic leadership for the financial technology activities of the OCC. The new office will be headed by a chief financial technology officer who will report to the senior deputy comptroller for bank supervision policy, according to the press release.
“The establishment of this office will enable us to be more agile and to promote responsible innovation, consistent with our mission,” Hsu said in the release.
The increased prominence of digital banking and FinTechs could lead to a serious financial crisis, Hsu said Sept. 7 at a conference organized by The Clearing House and the Bank Policy Institute.
“I believe FinTechs and big techs are having a large impact and warrant much more of our attention,” Hsu said at the event, as reported at the time by Reuters.
He argued that the rise of FinTech companies into the traditional financial sector, including through partnerships with banks, has led to more complexity and “de-integration” in the banking sector.