President Barack Obama’s economic policy staff recently met with stakeholders across the fintech ecosystem to discuss how fintech can support economic policy, Adrienne Harris, special assistant to the President of economic policy, noted in a White House blog.
The attendees included policy makers, fintech startups and investors. The meeting addressed cybersecurity, ways to manage small business, ways to help developing nations’ economies, helping consumers and managing big data.
Government-Fintech Industry Partnership Needed
Penny Pritzker, Secretary of Commerce, moderated a panel on how government can help ensure that innovators have the resources to develop products and services that strengthen the country’s economic competitiveness.
Panelists weighed in on how startups and financial companies are working together to develop scale and innovation. They also discussed the role government should play in making sure such partnerships reach their potential.
The U.S. Treasury Department and the Small Business Administration discussed the intersection of small and medium business enterprises and fintech. Small business creates about two thirds of net new jobs every year in the U.S. and employs more than half of all U.S. workers. However, these small companies historically have less access to capital to help them manage operations and expand.
The panel explored how financial service innovations can help entrepreneurs benefit from marketplace lending, payment processing systems to help with inventory management, and accounting, protection against fraud and cybersecurity tools that protect businesses and customers.
How Big Data Impacts Civil Rights
A recent report on the intersection of big data and civil rights indicated financial data can assist in preventing fraud, as well as help customers manage financial business and support access to credit for underserved communities. Such opportunities bring consumers risks, such as privacy and civil rights risks.
Roy Austin, Deputy Assistant to the President for Urban Affairs, Justice and Opportunity, noted the report’s recommendations and observed that fintech can support both opportunity and civil rights.
Jason Furman, Chair of the Council on Economic Advisors, led a panel concerning the intersection of financial health, fintech and financial inclusion. The panel spoke about the need for access to basic financial services and how new financial tools can empower consumers to make smart financial decisions.
While the number of financial products expands and financial lives become more complex, it is important that consumers can access tools to accomplish their goals.
Fintech Impacts Everyone
A recent graduate looking to pay student debt while saving for the future, a young professional getting ready to purchase their first home, or a retiree looking to access savings, financial health impacts everyone, regardless of demographics.
Gayle Smith, U.S. Agency for International Development Administrator, led a discussion on how fintech is enabling development goals, especially in nations where mobile phone-based payment systems are helping to make vulnerable communities more resilient.
These efforts allow governments to operate more transparently and underpin new business models to allow households living beyond the electricity grids in East Africa access clean energy for the first time, and allow Indian villages to develop sustainable water systems.
To make sure fintech innovations drive systemic improvements and support economic expansion, the panel noted the need for the private and public sectors to embrace a common vision to partner on the foundations for inclusive economies.
Federal Reserve Supports Blockchain
Federal Reserve Chairwoman Janet Yellen recently encouraged representatives from over 90 central banks to study emerging technologies, specifically mentioning bitcoin and the blockchain, during the Federal Reserve Annual Meeting, a three-day event hosted by the Federal Reserve, World Bank, and the IMF in Washington.
Stating that the global financial system had undeniably benefited from fintech, Yellen encouraged central banks to do all they can to learn about financial innovations including bitcoin, blockchain and distributed ledger technologies.
U.S. Post Office Sees Merit
The U.S. Postal Service has identified some ways that blockchain technology can improve its services and make it a more relevant player in global commerce, according to a report, “Blockchain Technology: Possibilities for the U.S. Postal Service.”
The postal service could use blockchain technology to improve the back end of its financial products like money orders and international money transfers.
Europe Explores New Technology
The European Parliament’s Committee on Economic and Monetary Affairs (ECON) recently released a report on virtual currencies and blockchain. In it, the ECON listed the opportunities and risks associated with the innovations in payments.
The British government is considering disbursing research grants using bitcoin or some other blockchain-based currency, according to Matthew Hancock, the Minister of the Cabinet Office and Paymaster General. In a speech at Digital Catapult, a government-funded think tank., Hancock said the Cabinet Office has begun exploring ways to use blockchains with a particular interest in how it could be used in the disbursal of government research grants.
The European Central Bank (ECB) revealed that it is taking a close look at exploring the potential of blockchain technology for a multitude of services that it helps collaborate with other central banks in Europe. The central bank revealed it is looking at innovations such as blockchain to help run payment and settlement systems.
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