Tech industry heavyweights to lobby for financial innovation

Tech industry heavyweights to lobby for financial innovation

Technology industry leaders Amazon, Apple, Google, Intuit and PayPal have formed a coalition to lobby for policy initiatives that will further the development of innovation in the financial services industry.

The collective, dubbed Financial Innovation Now, says it wants to engage with policymakers in Washington to promote the opportunities presented by technology transformation to improve consumer and business outcomes when managing their financial affairs.

"Innovation is coming to financial services, and now is the time for Washington to help enable a modern financial system that is more accessible, affordable, and secure," says Brian Peters, executive director of Financial Innovation Now. "This alliance of remarkably innovative companies brings a new voice to Washington's financial conversations, and we look forward to engaging on a wide range of opportunities. Whether it is protecting consumers, growing small businesses, or promoting financial literacy and savings, Financial Innovation Now wants policymakers to understand how new technologies can help solve today's policy challenges."

The formation of the group comes as banks have become increasingly vocal about the weight of the regulatory burden and the need to create a more level playing field by tightening the rules applied to new entrants to the industry from the technology sector.

Peters says that new technologies have a pivotal role to play in helping businesses and consumers to make better financial decisions, increasing convenience, transparency and ease of use and strengthening security to the benefit of all. Policy promotion will centre around emerging industry bugbears such as financial inclusion, real-time payments processing, alternative financing marketplaces and improved security.

"The regulatory environment must allow these new innovations to enter and compete in the marketplace," says Peters. "We look forward to working with policymakers to promote the adoption of new services, many of which are already bringing significant benefits to consumers and small businesses today."

Comments: (3)

A Finextra member
A Finextra member 03 November, 2015, 15:071 like 1 like

I've been in the banking innovation business for 40+ years. I can attest that today's banking leadership in the U.S. is asleep at the wheel when it comes to innovation. They are concerned about disintermediation from existing competition, regulatory compliance, and next Quarter's profits. They lack vision and the fortitude to make the really difficult decisions to make sure they are in business 10 years from now. If U.S. banks continue their no risk no innovation posture Fintechs will continue to win. Banking leadership please wake-up!

Roger Storm
Roger Storm - Euroclear Sweden - Stockholm, Sweden 03 November, 2015, 16:411 like 1 like

I've been in the business 26+ years and agree: the renewal speed of banks is at tortoise speed. Regulatory compliance investments crowd-out a good portion of resources from innovation, but this is not investments in future revenue streams or growth, merely stop-loss inurance. Many bank leaders - at least in Europe - do not seem to believe in their own future, and layoff staff by the thousands ... pressed by quarterly and RoE-stretch targets. There is also a big risk of underinvestment in underlying financial infrastructure piping, but for a true real-time intant servuce new tracks/channels/conduits for the transaction flows are also needed

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 04 November, 2015, 14:491 like 1 like

As an IT vendor, I've observed the finserv industry from the outside for 25+ years. While it may not be the fastest industry around, it has proven itself to be highly innovative by inventing the following products. 

  1. Credit card. 50 years after it was invented, I still can't think of a single other payment product that permits realtime transactions anywhere in the world between buyers and sellers who don't know each other. Cash is still its only viable competition.
  2. ARM, CDO, CDO2, CDS, MBS and a slew of structured financial products. These have made a lot of money for the industry.
  3. HDFC Bank PayZapp. Easily the best mobile wallet for bill pay - and I've come to this conclusion after trying out alternatives from fintech and TELCOs. HDFC Bank's PayZapp Ends My Bill Payment Woes

What's more, finserv has managed to be a very profitable industry:

  • Financial services was the most profitable sector in FORTUNE GLOBAL 500 in 2013:
  • Finserv continues to be a very profitable sector. 6 out of 10 most profitable FORTUNE GLOBAL 500 corporations in 2015 are banks.