WASHINGTON — The Treasury Department will release a report early next year on opportunities and risks posed by fintech as part of administration efforts to reform the financial regulatory structure, a top Treasury official said Wednesday.
Craig Phillips, a top adviser to Treasury Secretary Steven Mnuchin, suggested that a goal of the report is to consider how to harmonize fintech policy across multiple regulators.
“We plan to work with all the regulatory agencies to think about harmonization so rather than having every regulator go at this from a different angle, try to look at [fintech] as sort of a new and exciting trend,” said Phillips during an event at Georgetown Law School.
Treasury has already released two in-depth reports recommending policy changes reflecting "core principles" for financial regulation outlined in an executive order from President Trump earlier this year. A report released in June looked at commercial bank regulation and another released earlier this month studied capital markets. A third report looking at asset managers will be released in "days," Phillips said.
He noted the massive amount of investment dollars that have flowed into fintech companies as well as a gradual migration of financial services outside of the regulated sector. He said Treasury will not only study how innovative financial companies have the potential to reach underserved markets and lower costs, but it will also look at safety and soundness risks.
“There is now real scale when … someone like Amazon … if they entered something like financial services, they could obviously be enormous so I think there is great potential in that, but it obviously raises where banking begins and ends and how do we think about regulation,” said Phillips.
He said the current regulatory environment is “really fragmented” but the "report will be specifically focused on … trying to work with all the regulars to make sure it a harmonized answer.”