There’s been a major shift in the way our financial systems work.
FinTech, short for Financial Technology, or the use of technology in finance, is fast becoming the new normal. Increased connectivity and reliance on technology has brought with it a demand for new financial products, blurring the lines between traditional banking and less traditional financial providers.
One such example is Title III of the 2012 JOBS Act, better known as Regulation Crowdfunding. Regulation Crowdfunding is a securities regulation that permits anyone over the age of 18 to invest. Known as investment or equity crowdfunding, this regulation has allowed everyday people access to investment opportunities that were previously unavailable and has thereby expanded the pool of available capital for entrepreneurs.
The dramatic changes to our financial landscape provide opportunities for development as well as challenges for policy makers and the market. Financial regulations can either encourage or impede competitiveness. Government must walk a fine line between regulating the market and stifling market initiative. But they need to address the quickly evolving financial scene as innovative providers are entering the market with new financial solutions at a rapid pace. Risk management can ensure strong and sustainable growth by reducing the probability and severity of bad events but how do you make sure that a financial market cultivates growth and encourages people and businesses to participate and innovate in a socially responsible way?
Melissa Koide founded FinRegLab for just this reason. Previously the Vice President of Policy at the Center for Financial Services Innovation, she then served as Deputy Assistant Secretary for Consumer Policy at the U.S. Treasury Department until 2017. Through her work in government she saw the need for an independent organization to test financial methodologies and new technological tools. With FinRegLab she aims to inform policymakers and financial institutions alike in order to help advance financial inclusion.
You can hear more in my interview with Melissa Koide. Listen in!