In the dynamic world of FinTech, staying ahead of regulatory changes is crucial for both innovation and consumer protection. In a recent episode of the Risk Intel podcast, Edward Vincent, CEO of Strategic Risk Associates (SRA) Watchtower, sat down with Ian P. Moloney, SVP and Head of Federal & State Policy at the American Fintech Council (AFC), to delve into the regulatory landscape of 2023 and its potential impact on the FinTech industry this year in 2024.
Ian P. Moloney, a seasoned professional with a background in Washington, academia, and BaaS banking, is at the forefront of policy and regulatory affairs at AFC. AFC is the premier trade association representing the largest financial technology (FinTech) companies and the innovative banks that power them. They are dedicated to fostering transparent, customer-centric, and responsible innovation within the financial technology sector.
AFC's mission is to build a regulatory framework that encourages innovation while ensuring robust consumer protection. The association aims to steer clear of a regulatory environment that stifles innovation, opting instead for responsible and enduring progress in the FinTech space.
This episode sheds light on pivotal regulatory changes that happened in 2023, including the establishment of the OCC’s Office of Financial Technology, the Federal Reserve's Novel Activity supervision program, and the interagency guidance on third-party relationships. The overarching theme is the call for a unified approach to avoid potential regulatory arbitrage.
Ian shared how 2023 was as a landmark year for data privacy, with discussions spanning the potential expansion of the Fair Credit Reporting Act and the Consumer Financial Protection Bureau's (CFPB) focus on implementing Dodd Frank 1033. The complexity of data privacy issues, especially regarding consumers' rights to access their data, took center stage last year, with potential benefits for innovative FinTech companies. These common themes will carry over into 2024 and beyond.
As the discussion turns towards 2024, Ian offers valuable recommendations throughout this episode for banks navigating the evolving regulatory landscape.
"Staying informed about ongoing developments in data privacy and third-party risk management is key," said Ian P. Moloney. "The anticipation of continued regulatory scrutiny underscores the importance of a clear understanding of regulatory expectations."
The conversation continued into heightened concerns about potential regulatory enforcement actions and the need for regulators to provide clear, specific guidance to banks and FinTech companies. A recurring theme is the call for a "compliance-first" approach among FinTech companies, suggesting that this ethos may become a defining principle in the industry.
As the podcast concludes, the focus shifts to the future, with a keen eye on 2024, which will be covered in more detail in part two of this podcast series with Ian and the American Fintech Council. The ever-evolving nature of the regulatory landscape requires proactive engagement and a commitment to responsible innovation. The discussion underscores the need for a collaborative approach, ensuring both regulators and FinTech entities are well-versed in the evolving standards and expectations.
In the fast-paced world of FinTech, where innovation and regulation intersect, staying informed, proactive, and compliance-first emerges as the guiding principles for success. The journey through last year's events in 2023 provides valuable insights, setting the stage for a dynamic and transformative year ahead in 2024.
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