On July 31, 2018, the U.S. Department of Treasury issued its highly anticipated report on FinTech regulation and innovation entitled "A Financial System That Creates Economic Opportunities: Nonbank Financials, FinTech, and Innovation."
Recognizing the proliferation of technological advances and activity from FinTech and non-bank entities, the report surveys the current regulatory landscape for a broad array of FinTech innovations.
The Report generally finds that while financial institutions and tech firms have embraced the shift to digital processes to meet customer demands, the regulatory environment lags.
Altogether, the report makes more than 80 recommendations, which aim to further enable, sustain, and advance the digital transformation of financial services.
Two key elements are present throughout the report:
- Treasury believes that the current U.S. regulatory framework is not conducive to innovation, and changes are necessary to foster innovation; and
- Treasury encourages the U.S. to learn approaches from certain other jurisdictions with respect to regulating innovation in financial services.
Our client alert explores the following thematic areas:
- Embracing Digitization, Data, and Technology.
- Aligning the Regulatory Framework to Promote Innovation.
- Updating Activity-Specific Regulation.
- Enabling the Policy Environment.
Who is affected?
The recommendations in the report potentially affect a wide range of entities, including bank and non-bank financial services entities, technology platform providers, third-party servicing providers to these entities, among others.
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