In February, we looked at some of the regulatory issues that have arisen with fintech firms entering banking. This month, we are examining some of the consumer issues that have surfaced with these innovative ways to bank.
Technology has revolutionized the way consumers interact with the financial system. Older innovations (such as the internet and mobile devices) and newer developments (such as big data and computer algorithms) have changed banks and what we think of as banking: making deposits, taking out loans and managing investments.
Agencies charged with consumer protection of financial activity have had to adapt as well. While consumers face a dizzying array of new choices—in products and providers—and the possibility of wider access and lower costs, potential pitfalls have emerged too. Two of the biggest are data security/privacy and the possibility of consumer confusion about the protections available, exacerbated by the speed at which products and providers are being launched.
