September 12, 2017

The U.S. GAO published a statement focusing on the subsectors and regulatory oversight in fintech. GAO, in April 2017, issued the first of a series of planned reports on the fintech industry that describes four commonly referenced subsectors of fintech and their regulatory oversight. This testimony summarizes the findings of that report and describes commonly referenced fintech subsectors; potential benefits and risks of these subsectors, including recent industry trends; and regulatory oversight of these subsectors. This statement is based on the April 2017 report on the fintech industry.

Fintech products and services offer various potential benefits, including increased access to financial services, lower costs, increased speed of service, and convenience. Fintech products and services also pose various potential risks, including data security and privacy risks, risks posed by the use of alternative data, risk of human error or confusion, and risk posed by incomplete or inaccurate data. Trends that have emerged across the fintech landscape include the creation of partnerships between traditional financial institutions and fintech firms, formation of hybrid services, and establishment of self-regulatory efforts.

 

Regulation of the commonly referenced subsectors depends on the extent to which the firms provide a regulated service and the format in which the services are provided, with responsibilities fragmented among multiple entities that have overlapping authorities. Federal oversight authorities that apply to regulated activities generally include risk management oversight related to services provided to federally regulated depository institutions, consumer protection oversight, and securities and derivatives markets oversight. Some agencies have taken a number of steps to understand and monitor the fintech industry. State licensing laws and oversight mechanisms, including consumer protection, vary by state. Officials from the Conference of State Bank Supervisors note that the states are working on developing tools that can facilitate compliance with state-by-state licensing mechanisms.

 

Related Links

GAO Statement (PDF)

Fintech Report, April 2017 (PDF)

Keywords: Americas, United States, Banking, Fintech, Regulatory Oversight, GAO

Related Articles
News

EBA Report Assesses Regulatory Framework for Fintech Activities

EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market.

July 18, 2019 WebPage Regulatory News
News

OSFI Revises Capital Requirements for Operational Risk for Banks

OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017.

July 18, 2019 WebPage Regulatory News
News

OSFI Consults on Revised Principles for Management of Liquidity Risk

OSFI proposed revisions to Guideline B-6 on the principles for the management of liquidity risk.

July 18, 2019 WebPage Regulatory News
News

ESMA Guidance on Disclosures for Credit Rating Sustainability Issues

ESMA published the technical advice on sustainability considerations in the credit rating market, along with the final guidelines on disclosure requirements applicable to credit ratings.

July 18, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimation of Expected Credit Losses by Firms

FASB issued a second question-and-answer (Q&A) document that addresses more than a dozen frequently asked questions related to the Accounting Standards Update No. 2016-13 titled “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”

July 17, 2019 WebPage Regulatory News
News

US Agencies Delay Enforcing Volcker Rule Restrictions on Foreign Funds

US Agencies (FDIC, FED, and OCC) announced that they will not take action related to restrictions under the Volcker Rule for certain foreign funds for an additional two years.

July 17, 2019 WebPage Regulatory News
News

SRB Announces SRF Receives Cash Injection, Grows to EUR 33 billion

SRB announced that the Single Resolution Fund (SRF or the Fund) received a cash injection of EUR 7.8 billion from 3,186 institutions in 2019, bringing the total amount in the Fund to about EUR 33 billion.

July 17, 2019 WebPage Regulatory News
News

FASB to Propose to Delay CECL Compliance Deadline for Certain Entities

FASB published a summary of the tentative decisions taken at its Board meeting in July 2019.

July 17, 2019 WebPage Regulatory News
News

IMF Publishes Report on 2019 Article IV Consultation with Vietnam

IMF published its staff report in context of the 2019 Article IV consultation with Vietnam.

July 16, 2019 WebPage Regulatory News
News

European Parliament Elects Next President of European Commission

European Parliament elected Ursula von der Leyen from Germany as the first female President of the next European Commission for a five-year term from November 01, 2019.

July 16, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3476