The Office of the Comptroller of the Currency (OCC) is one of a dozen or so federal agencies that has regulatory oversight on financial institutions. Financial innovation or Fintech is challenging long-held processes and firms and the OCC is attempting to update and adjust to the future of internet finance. Last week, the OCC announced the creation of an Innovation Office and published a document alongside the statement outlining their recommendations for implementing a “Responsible Innovation Framework”.
The OCC’s “Innovation Framework Development Team has developed these recommendations and they are highlighted below:
- Create an Office of Innovation to Implement the Framework
- Establish an Outreach and Technical Assistance Program
- Conduct Awareness and Training Activities
- Encourage Coordination and Facilitation
- Establish an Innovation Research Function
- Promote Interagency Collaboration
The OCC’s initiative is not the only push inside the Beltway to adopt an environment of change. The SEC has scheduled a Fintech forum for later this month. Congressman McHenry has proposed a bill to establish “Innovation Offices” in each of the various regulatory agencies engaged with Fintech. The CFPB recently published a report on Fintech innovation. Expect more.
The challenge for government is to encourage change, as it can be great for consumers and business, without alienating their established constituents – usually traditional banks. Old school financial firms are attempting to manage the fast evolving sector. The ones that will succeed and survive will be the ones that embrace a more entrepreneurial strategy and creative disruption. What they cannot do is allow existing business practices to crush innovation. Otherwise they will end up going the way of Blockbuster and Kodak (that didn’t work out too well).
Read the OCC document below.
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