The current regulations regarding various licenses and charters are out-dated and ill-suited for financial technology. The Office of Comptroller of the Currency (OCC) could either hinder or promote the growth of fintech firms. Currently, the OCC supports the traditional financial sector, which promotes stability, security, and safety. For the OCC to boost fintech, it needs to go against the values of traditional finance and tolerate failure. If the OCC grants charters to fintech firms, it needs to get rid of its zero failure goal. Instead, the OCC should focus on requiring companies to have a clear exit strategy in the event of a failure.
I believe that financial technology has shown its potential and that the OCC should update its rules to adapt to fintech firms. With the help of OCC fitech firms can better compete with the traditional financial sector. This is a win-win situation by allowing for more innovation and keeping the market competitive. Failure is prone to happen, but the benefits of a company that can dominate globally outweighs the risks of the few companies that don’t make it. With more risks comes more rewards, so the OCC should expand its policies to charter rising fintech firms.
Source: How Fintech Can Take Off Without Getting Hampered by Regulations
I think the mere thought of “failure” is a hindrance in this post 2007-2008 global financial crisis era. I agree that a different mindset is needed to keep the FinTech innovation train moving, but I’m just not sure that the industry is willing to fully embrace it and change its conservative ways. Nice post.