Financial Innovation Now, a public policy coalition comprised of Amazon, Apple, Google, Intuit and PayPal, on July 12 released a report titled, “Examining the Extensive Regulation of Financial Technologies.”
The report examines current state and federal regulatory compliance requirements for new marketplace innovators in financial services.
According to the coalition, analysis shows innovators in financial services must devote significant time and resources to regulatory compliance that can chill investment and innovation or slow time to market – ultimately harming consumers and businesses that benefit from easier access and more affordable services.
While many of the regulations are necessary to protect consumers, small businesses and the economy, some regulations are redundant, conflicting or antiquated, the coalition said.
New technologies may themselves also solve regulatory policy goals and obviate the need for some regulations. In other cases, modernizing regulations may enable maximum benefit from modern technology, the internet and mobility, according to Financial Innovation Now.
“Technology companies and startups today are rapidly changing the financial services landscape and consumers and small businesses are benefiting from innovation and new competition,” said Brian Peters, Executive Director and Financial Innovation Now and Partner at Franklin Square Group.
“New technology now offers consumers more secure payment options and more control over their financial lives, and it enables small businesses to quickly access new sources of working capital. These new financial services and products are heavily regulated and everyone in this sector, old and new, must run a gauntlet of legal duties. But these compliance requirements constitute a significant market barrier, particularly for new entrants, and can sometimes serve to protect incumbent providers from new competition. Our hope is that this report helps policymakers understand the regulatory landscape for financial technology and contributes to the discussion about how to modernize financial services policy.”