Backgrounder on Big Data and Fintech Companies

Last updated: 2/15/2017

Excerpt from "FinTech and Consumers: A Preliminary Overview of Important Consumer, Privacy, Small Business, and Civil Rights Issues." This draft primer is subject to change (version of 2 December 2016):

Technological innovation and the rapid adoption of mobile phones and other digital devices and applications are bringing sweeping changes to the ways consumers engage and interact with financial services. New technologies now entering the financial sector have unleashed far-reaching developments that will continue to impact businesses, recent and new commercial start-ups, regulation, and consumer interaction with and use of financial products.

Meanwhile, numerous regulators have engaged on the issue, with workshops, white papers and proposals for FinTech regulation. This fall,  the chief national bank regulator, the Office of the Comptroller of the Currency (OCC), provided an outline of a limited-purpose FinTech charter that consumer groups and state regulators contend will preempt strong state consumer protections, undercut existing federal laws and precipitate a race to the bottom.

FinTech technologies developed for or adopted for the financial services industry are being used for both consumer-facing and business-to-business applications. FinTech companies take advantage of the capabilities of “Big Data” practices to offer online services that enable them to compete with the traditional banking and credit sector. The ability to use new technology in innovative ways by these new entrants has challenged the legacy financial institutions, which find themselves on the defensive. These companies realize they must embrace technology if they are to remain competitive. 

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