In a recent interview with Unifimoney, InnReg CEO Francesco Matteini shared his insights on the current status of financial innovation and regulation.
Matteini highlighted areas where open questions about oversight create a regulatory vacuum, leaving fintechs without much-needed compliance guidance.
This state of affairs often leads to innovators assuming otherwise avoidable risks, even - which is not a prudent approach. As a result, community banks and credit unions can be reluctant to offer innovative financial tools. Matteini believes that they should consider all existing regulatory risks and, moreover, consider that all innovation is almost inseparable from technological development. “Almost all innovation is technology-based, and bringing in technology built on much more modern platforms into banking systems is a challenge,” he explains.
Matteini advises community banks to map out and analyze all the relevant compliance actions required for remaining in line with community banking regulations in order to pursue innovation.
In this case, smaller community banks and credit unions have an advantage over larger institutions in having to take fewer steps from identifying an innovative tech tool to approving its usage. Having a more agile sign-off process and a streamlined governance structure could be exactly what leads to the more rapid adoption of new technology.
The full interview is available on Unifimoney: https://www.unifimoney.com/blog/the-braintrust-francesco-matteini-innreg-on-financial-innovation-and-operating-in-uncertainty.
