Report: US Comptroller Says Bank-FinTech Partnerships Must Monitor Risk

After his earlier remarks about partnerships between banks and FinTechs led members of the financial services industry and House Republicans to worry that he would discourage innovation, Acting Comptroller of the Currency Michael J. Hsu has reportedly explained that he wants to ensure that firms monitor their risks.

When multiple firms partner, it can be more difficult to monitor risk and to assign responsibility when there’s a problem, the chief of the Office of the Comptroller of the Currency (OCC) said in a Wednesday (Oct. 12) interview with Reuters that was published Thursday (Oct. 13).

“Look, bank-FinTech partnerships, they’re here to stay,” Hsu said in the report. “I’m not trying to do away with them. This is the future, so let’s do the future right.”

As reported Sept. 7 when Hsu spoke at The Clearing House and Bank Policy Institute’s yearly conference in New York, Hsu said the increased prominence of digital banking and FinTechs could lead to a serious financial crisis.

Read more: US Comptroller Says FinTechs, Big Tech Require More Attention

He said the rise of FinTech companies into the traditional financial sector, including through partnerships with banks, had led to more complexity and “de-integration” in the banking sector.

“My strong sense is that this process, left to its own devices, is likely to accelerate and expand until there is a severe problem, or even a crisis,” Hsu said at the conference, as reported at the time by Reuters.

In Wednesday’s interview with Reuters, Hsu also reportedly said policymakers may be spending less time looking at some types of financial technology because they’re giving so much of their attention to cryptocurrency.

“We’re spending too much time on crypto,” Hsu said in the report. “It’s interesting, it has thorny issues… but relative to other technology and banking issues, I think we’re now kind of overweight crypto.”

An OCC spokesperson told PYMNTS in an email that the agency has no additional comments to share.